Google Play Will Let Developers Use Alternative Billing Systems in South Korea, While Apple Has Yet to Make Changes

[MacRumors]

The South Korean government recently passed a law that bans Apple and Google from requiring developers to use their in-app purchase systems in the App Store and Google Play respectively, and Google has now announced changes to comply with the law.

In a blog post, Google said it will be giving developers the option to add an alternative in-app billing system alongside the Play Store's billing system for Android smartphone and tablet users in South Korea. Google said the users will be able to choose which billing system to use at checkout, as seen in the example image above, and the company plans to provide developers with more details "in the coming weeks and months."

Google still plans to charge a service fee on in-app purchases completed through an alternative billing system, but it will reduce the fee by four percentage points. For the "vast majority" of developers, this means the fee will drop from 15% for transactions through Google Play's billing system to 11% for transactions through an alternate billing system.

"Like any business, we need to have a sustainable model to continue to improve our products while maintaining important user protections," said Google, in explaining why it charges a service fee on the Google Play store. "Just as it costs developers money to build an app, it costs us money to build and maintain an operating system and app store that makes those apps easily and safely accessible by consumers."

Google also warned that alternative billing systems may not offer the same security and privacy protections as Google Play's billing system.

Apple meanwhile has yet to make any changes to App Store billing in South Korea. The company previously said the law "will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, [and] make it difficult to manage their purchases," while making parental controls less effective.

In October, Apple told the South Korean government that it was "already in compliance with the new law and did not need to change its app store policy," according to Reuters. We've reached out to Apple for comment and we'll update this story if we hear back.

Article Link: Google Play Will Let Developers Use Alternative Billing Systems in South Korea, While Apple Has Yet to Make Changes

 

[TheYayAreaLiving 🎗️]

Hopefully Apple will follow Google. It’s just a matter of time.

 

[btrach144]

“In October, Apple told the South Korean government that it was "already in compliance with the new law and did not need to change its app store policy”

Isn’t that a straight up lie?

 

[Michael Scrip]

I know that image is just illustrative... but what actually happens when you tap the new external payment button?

Does the purchase happen right where you are? In the app? Using the credit card you have saved in your Google account?

Or does it kick you to a web browser where you have to fill out forms and type in your credit card and stuff?

If it's the former... I don't see how that will help the consumer. I don't really care who processes the payment. Just do it. It seems like they gave me an extra button for nothing.

And if it's the latter... I don't want to have to type my credit card number into some website. No. Thank. You.

The funny thing is... after all these lawsuits and whatnot... the developer won't see much difference in their income.

Google will take 11% instead of 15%... ok fine.

BUT... now the developer has to pay 2.9% + 30 cents on every transaction to Stripe or PayPal or whoever. And they have to manage this other external payment account... taxes, accounting, etc. It's extra work for the developer.

So at the end of the day... what does this extra payment button give the consumer or the developer? What's this all for?

 

[Joe Rossignol]

I know that image is just illustrative... but what actually happens when you tap each of those buttons?

Does the purchase happen right where you are? In the app? Using the card you have saved in your account?

Or does it kick you to a web browser where you have to fill out forms and type in your credit card and stuff?

Google said more details to come in weeks/months ahead, so we simply don't know yet.

 

[dguisinger]

A service fee..... for providing no value....... here, purchase our CONTENT that is hosted OUTSIDE of the app. Enjoy our passed-through 11% fee.

Exactly the thing these regulations are trying to eliminate. Because lets be honest, its not the credit card fee everyone was complaining about, it was these guys leaching off the cost of a sale that they did nothing but handle the money for. Very few developers would be complaining if these stores charged the regular card processing fee for something they weren't involved in selling, if that was all they were doing.

For free/subscription based apps, they should be charging a fixed distribution fee. Beyond that, you are entitled to nothing as you facilitate nothing.

 

[radow]

I know that image is just illustrative... but what actually happens when you tap each of those buttons?

Does the purchase happen right where you are? In the app? Using the card you have saved in your account?

Or does it kick you to a web browser where you have to fill out forms and type in your credit card and stuff?

Guess there will be custom protocol schemes, which tries to launch the app, and automatically fallback to website if the app is not installed.

 

[ruka.snow]

Ether way, Google are still getting their cut.

 

[FightTheFuture]

Google said more details to come in weeks/months ahead, so we simply don't know yet.

Both Apple and Google have no incentive to make an alternative billing process outside their stores easy for the user. Can’t blame them either.

 

[Altivec88]

If Google charges a fee of their choosing, I don't see how this accomplishes anything. Apple should do the same thing but charge the same 15% they always do. Technically, they will have multiple payment systems that follows the law. The only difference is that you pay more to use something else. lol. I think these laws are nonsense. These are Googles and Apples store and OS, they have the right to charge what they want and people have the right to buy their devices or not. Governments should stay out of the market place.

With Google' solution, their 11% plus the other payment provider mark up will generally be the same cost as just using Google's payment method. Anyone that would take the risk of using the other payment methods without saving any money is crazy.

 

[Ebarella]

“In October, Apple told the South Korean government that it was "already in compliance with the new law and did not need to change its app store policy”

Isn’t that a straight up lie?

That's why the "we follow local laws" excuse is terrible. Yes, when it comes to remove dissident apps or the Quran, not when it affects profits

 

[Luke MacWalker]

This is just brilliant! ?

 

[sdf]

“In October, Apple told the South Korean government that it was "already in compliance with the new law and did not need to change its app store policy”

Isn’t that a straight up lie?

Not really? Allowing third party payment systems is a matter of policy, not technology. Nothing but Apple policy (and enforcement via App Review) prevents developers from launching a web view or browser to take payment and returning to the app when it's done.

If Apple's policy is to allow third party payment for apps in South Korea, no technology change is needed.

Adding UI and system frameworks to do this might make the process more elegant, but unless the South Korean law specifies the OS must implement a native UI that native UI wouldn't be necessary to comply.

 

[Realityck]

Google still plans to charge a service fee on in-app purchases completed through an alternative billing system, but it will reduce the fee by four percentage points. For the "vast majority" of developers, this means the fee will drop from 15% for transactions through Google Play's billing system to 11% for transactions through an alternate billing system.

"Like any business, we need to have a sustainable model to continue to improve our products while maintaining important user protections," said Google, in explaining why it charges a service fee on the Google Play store. "Just as it costs developers money to build an app, it costs us money to build and maintain an operating system and app store that makes those apps easily and safely accessible by consumers."

Google also warned that alternative billing systems may not offer the same security and privacy protections as Google Play's billing system.

Apple meanwhile has yet to make any changes to App Store billing in South Korea. The company previously said the law "will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections, [and] make it difficult to manage their purchases," while making parental controls less effective.

It seems Google management has this all on a fast track to comply with South Korea. IMHO Apple's justification for retaining billing system mostly though the store is losing. On a Mac you can easily buy a software product from the Web. I see this solution as very progressive. Yes you still need some service charge for store to be ran/managed for software security.

 

[svish]

11% to use alternate payment method! Not good for app developer. Anyway option now exists for users to choose

 

[DelayedGratificationGene]

Apple will allow it as well and follow up with an invoice for Platform Hosting Fees….done

 

[dguisinger]

11% to use alternate payment method! Not good for app developer. Anyway option now exists for users to choose

Except the spirit of the law was never to use an alternative payment method for the purpose of using an external payment method.

It was because most developers who sell stuff like content and are multi-platform don't need the services these vendors claim they are giving them. its 3% vs 15%, or 3% vs 30%.

Saying go do your payments, but we are still going to charge you 11%....even though we did nothing as a middle man in the transaction, goes against the spirit of the laws and regulations being passed and discussed.... I can only see this backfiring and causing more strict regulation.

 

[DarelRex]

"Google Play Will Let Developers Use Alternative Billing Systems in South Korea, While Apple Has Yet to Make Changes" — Translation: Both Google and Apple have yet to make changes. Google has announced that it "will," with details "in the coming weeks and months," but such an announcement is not only very vague, but not at all legally binding. What is binding is the law, and the courts' interpretation of it.

 

[dwaite]

“In October, Apple told the South Korean government that it was "already in compliance with the new law and did not need to change its app store policy”

Isn’t that a straight up lie?

Which part do you think they are not in compliance with?

 

[alchemistmuffin]

already in compliance with the new law and did not need to change its app store policy

Meaning Apple’s going to pull out of South Korean market entirely? I think this is the only option given how bullish the company is.

 

[dwaite]

Saying go do your payments, but we are still going to charge you 11%....even though we did nothing as a middle man in the transaction, goes against the spirit of the laws and regulations being passed and discussed.... I can only see this backfiring and causing more strict regulation.

A transaction that was initiated because of an application built on top of Google Play services, being sold under an agreement with Google Play which includes an agreement around proceeds on initial app sale and on subscriptions and one-time purchases made within the app.

The "no middleman" alternative is to not use Google Play services, not list on Google Play, and do your own marketing/listing to convince users to side-load your app.

The reality is that 'small developers' are going to get little direct value from going outside the Play store. What you'll see is:

• alternative stores with varying degrees of success and varying fee structures
• large companies pushing to side-load apps both to realize more of the revenue and to work around any business restrictions in the store agreement.

 

[dwaite]

That's why the "we follow local laws" excuse is terrible. Yes, when it comes to remove dissident apps or the Quran, not when it affects profits

Then maybe you can explain how they are not in compliance?

 

[KindJamz]

Apple will do whatever china and/or S Korea tell them to do. They have no power in there. Sucks when basically your entire lineup is built in these places.

 

[dba415]

Google doesn't have to do anything because 3rd party app stores are already allowed.

A developer on Google has 3 choices now.
1. Use play billing and pay the service fee
2. Use your own billing and pay a lower service fee
3. side load or run a 3rd party App Store

It's apple that gives the developers zero choice in the matter.

 

[mrochester]

Google doesn't have to do anything because 3rd party app stores are already allowed.

A developer on Google has 3 choices now.
1. Use play billing and pay the service fee
2. Use your own billing and pay a lower service fee
3. side load or run a 3rd party App Store

It's apple that gives the developers zero choice in the matter.

Developers don’t just have to develop for android. iOS and other platforms are options 4,5, 6 and beyond.