Google faced strong backlash from developers globally after it announced it will enforce its own in-built billing system, which charges a 30 per cent fee to all app developers.
According to the IAMAI, as a payment aggregator, currently unlicensed but soon to be licensed in India, Google Billing System can choose which payment instruments it would work with and which ones it would not.
“The new draft RBI guidelines on payment aggregators, too, allows for that freedom. The compounding factor for many founders is the current revenue sharing policy of the Play Store,” it said in a statement.
Google said in a blog post on Monday: “We have clarified the language in our payments policy to be more explicit that all developers selling digital goods in their apps are required to use Google Play‘s billing system.
The tech giant added it would give app developers a one-year grace period to adopt the system, while it will start enforcing the billing system on the Play store’s new apps from January 20, 2021.
“Just because Google owns the gate and the gateway to the digital ecosystem of this country, they should not act arbitrarily and enforce their rules and regulations which are contrary to our country’s laws,” said Vishwas Patel, Founder, CCAvenues and Chairman, Payments Council of India.
“Also, they cannot force Indian apps developers/owners selling digital services to compulsorily use the Google Billing and payment system and charge 30 per cent MDR,” he added.
Google, on its part, clarified that the policy change will not affect the majority of app developers as nearly 97 per cent of those that sell digital goods already use the Play’s billing system.
“Google’s stand in courts is that it does not need RBI authorisation as it is not a payment system operator and here it is mandating that Indian apps use only Google’s proprietary Billing and Payment systems. Google should not exercise its dominant position, rather allow a level playing field for everyone in the ecosystem,” Patel said.
According to the IAMAI, prima Facie, Google’s announcement today even if legal is certainly not innocuous.
“For many founders of Indian start-ups, this brings back fears of the not so old deeply problematic revenue share model between VAS service providers (mainly digital goods) and telcos, it said.
Telcos took up to 70 per cent revenue share from VAS companies on the pretext of discovery, marketing and collection.
“In India, 98 per cent of people use mobile Internet and more than 90 per cent of people use Android phones, which gives Google control over many layers between customers and their service providers,” the IAMAI stressed.