Google forced to defer app levy in India to April 2022

Photograph: Dado Ruvic/Reuters

Google on Monday said it is deferring the deadline for developers in India to integrate with its Play billing system to March 31, 2022.

The development comes days after many Indian developers and start-ups had raised concerns around Google's Play billing system, saying the tech giant cannot force Indian app developers/owners to sell digital services by compulsorily using its billing system.

Interestingly, Paytm - which competes with Google Pay - has announced the launch of its Android Mini App Store to support Indian developers.

In a blogpost on Monday, Google said it had heard some additional questions from the developer community in India after posting its clarification to its Play Payments policy at the end of September.

The company is also setting up 'listening sessions' with leading Indian start-ups to understand their concerns and will also hold 'policy workshops' to help clear any additional questions about its Play Store policies, it added.

"... we're also extending the time for developers in India to integrate with the Play billing system, to ensure they have enough time to implement the UPI for subscription payment option that will be made available on Google Play -- for all apps that currently use an alternative payment system we set a timeline of March 31, 2022," Google said.

Google had previously stated that apps that choose to sell digital content through its Play Store have to use Google Play billing system and pay a percentage of the in-app purchase as a fee.

It had given time until September 30, 2021 to complete the necessary updates.

The tech giant emphasised that the payments policy is not new and it has always required developers who distribute their apps on Play, to use Google Play's billing system if they offer in-app purchases of digital goods.

"To be clear, the policy only applies if a developer charges users to download their app or they sell in-app digital items, which is less than 3 per cent of developers with apps on Google Play," it said.

Any app that offers in-app purchase of digital goods like unlocking additional features or buying tokens to power up a game character or paying for songs, will be required to use Google Play's billing system.

Google charges a 30 per cent cut of the payment made within the app.

However, cases like payment for physical goods (like ride-hailing services), bill payments and content subscription via the developer's own website will not require the Play billing system.

Many Indian start-ups had raised concerns around the steep charge, while some were of the view that India needs a local app store to provide more choice to consumers.

On concerns around limited payment mechanisms, Google said Play billing supports more than 290 forms of payment globally.

"Over the last several years we have added more local forms of payment in India including credit and debit cards, net banking, carrier billing, gift cards, and all supported UPI apps.

"And we will continue to engage with developers and consumers on adding additional forms of payment," it added.

Google also noted that developers should have a choice in how they distribute their apps, and that stores should compete for consumers' and developers' business.

"Android is open and choice is a core tenet of the operating system. It's why users have always been able to get apps from multiple app stores... In fact, most Android devices ship with at least two app stores preinstalled, and consumers are able to install additional app stores," the blog said.

Google's policies on its Play Store have been in controversy for some weeks now.

On September 18, Google had blocked Paytm from its Play Store for a few hours for violating its policy on sports betting activities.

The app was later restored after the fintech app removed the 'cashback' feature linked to a game on the app.

Paytm had alleged that it was "arm-twisted" by the search engine major to comply with its biased Play Store policies "that are meant to artificially create Google's market dominance".

Food delivery apps Zomato and Swiggy have also received notices from Google for their in-app gamification features that allegedly violate Play Store guidelines.

Paytm on Monday said it has launched Android Mini App Store as part of its attempts to break Google's monopoly over distribution of Android apps.

Mini apps are a custom-built mobile website that gives users app-like experience without having to download them.

Paytm said it is providing listing and distribution of these mini-apps within its app without any charges.

For payments, developers will be able to give a choice of Paytm Wallet, Paytm Payments Bank, UPI, net-banking and Cards to their users.

The company said it provides Paytm wallet, Paytm Payments Bank account and UPI at zero charges and levies a 2 per cent charge for other instruments like credit cards.

The local Indian app store aims to drive the Aatmanirbhar Bharat mission while keeping the digital consumer spends within India, it added.

More than 300 app-based service providers such as Decathalon, Ola, Park+, Rapido, Netmeds, 1MG, Domino's Pizza, FreshMenu, NoBroker have already joined the program.

The app store has been running in beta with select users and witnessed over 12 million visits in the month of September.

"I am proud that we are today launching something that creates an opportunity for every Indian app developer.

"Paytm Mini App Store empowers our young Indian developers to leverage our reach and payments to build new innovative services.

"For Paytm users, it will be a seamless experience that doesn't require any separate download and enables them to use their preferred payment option," Vijay Shekhar Sharma, founder and CEO of Paytm, said.

A report also noted that entrepreneurs from leading startups met government officials virtually on Saturday to raise their concerns over Google's billing policies and alleged dominance in India's apps market.