Tuesday, July 5, 2022

Google's in-app payment policy leads to content price hikes - The Investor

Last updated Tuesday, May 24, 2022 20:14 ET , Source: NewsService

With Google poised to begin removing applications that disobey its mandatory in-app payment policy from June 2, South Korean content providers are raising consumer charges as the global IT giant’s billing rules require hefty fee rates.

Google’s in-app payment system means that consumers must use the internal payment system developed by the app market operator, also Google, when purchasing paid content from apps in Google’s Play Store.

For app developers using Google’s in-app billing system, each pay a 15 percent commission to Google for the first $1 million in annual revenue, while anything over that is charged at a 30 percent rate. Due to the heavy cut Google takes, major Korean app developers used to have their own external billing systems so they did not lose any commission in the payment process.

In order to cope with Google’s mandatory billing policy and the substantial fees, the country’s leading webtoon service providers -- Naver and Kakao -- have announced that they will raise the prices of their in-app cash tokens between 10 and 20 percent.

Kakao Entertainment, Kakao’s webtoon subsidiary, said the increased fee rate will take effect from June 1. Naver Webtoon initially planned to enforce the hiked prices from Monday, but postponed the implementation due to technical issues.

Despite the technical issues, a Naver Webtoon official said the new rates will take effect before next Wednesday, a day before Google’s purge of noncomplying apps.

According to both companies,...

Read Full Story: http://m.theinvestor.co.kr/view.php?ud=20220525000113

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