App developers may have to pay 6% commission to Google

From October 31 Indian app developers and startups offering videos, audio content, or e-books may have to pay only a 6 per cent commission for the in-app purchases on Google Play Store. This comes after Google announced a change in its billing system allowing the developers to pay via mechanisms other than the Google Play billing system.

Other apps will have to pay around 11 per cent commission if they choose to pay from other platforms, the report added.

The latest commission rates are considerably lower than the original rates introduced by Google while announcing the Play store policy two years ago. It currently charges a 30 per cent commission from the developers and startups.

An expert was quoted in the report as saying that when a customer now opts for an alternative billing option, Google will have to forego the cost of processing payments. It approximately stands at 4 per cent.

“So, in user choice billing, if the user chooses the developers billing, as opposed to Google Play Store billing, the service fee will be reduced by 4 per cent, which is the kind of generalised cost of doing the payment processing. But other than that, all the other services are the same.”

Apart from India, Google is also introducing the new system to Australia, Indonesia, Japan, and European Economic Area. Business Standard