[단독] Controversy over’in-app payment’ Google receives only 15% commission up to 1.1 billion won in sales

Input 2021.03.15 17:46

Google ahead of the introduction of mandatory in-app payments in October
Controversy over ‘30% commission’ in apps that trade digital goods
Only 15% commission for annual sales of up to $1 million from July,
30% charge for excess sales… Internally confirmed

Starting in July, Google’s app market’Google Play’ has paid 15% of the annual sales of applications (apps) that are traded as digital goods, such as content or game items, up to $1 million (approximately 1.1 billion won), and exceeds this. We charge 30% for the minute.

Apple has cut payment fees by 15% from January this year, limiting the target to’company with annual sales of less than $1 million’, while Google is responsible for’one million or less’ for all companies regardless of the size of sales. It means that you will only get half the fee.

For example, if company A, a webtoon service, earns 3 billion won a year through content payment and exceeds the “1 million dollar standard,” Apple charges 30% of the commission for all 3 billion won, and Google charges 1 million dollars. It will receive 15% up to 1.1 billion won, and 30% for the remaining 1.9 billion won. In this case, the average commission rate that Company A provides to Google will be reduced to 24.5%.

According to the industry on the 15th, Google is ahead of the enforcement of the so-called’in-app purchase’ obligation to pay using a system developed by Google when paying for paid content for all digital content apps in October. It is known that the plan to reduce the in-app payment fee for the content has been internally confirmed.

Most developers are expected to benefit from commission cuts because 99% of the world’s apps on Google Play have annual sales of less than $1 million. Google plans to implement this in-app payment fee policy all over the world from July 1st.

Google’s fee reduction plan came out as criticism increased at the same time as the announcement of the in-app payment implementation plan. Initially, Google was planning to implement an in-app payment policy that charges 30% of the revenue generated from digital content as a fee for new apps on Google Play starting in January this year, and for existing apps starting in October.

However, there have been criticisms that the fees are excessive, mainly in the content industry, which has bypassed Google’s fee policy through external payment methods (including the use of payment agencies). Accordingly, the National Assembly, etc., pushed for a reduction in fees and at the same time proposed a bill to prevent compulsory in-app payments (amendment to the Telecommunications Business Act), which said that app developers should be able to choose in-app payments. Google has both delayed the enforcement of in-app payment obligations for all developers, including new operators, to October, and has also started to create a plan to cut fees.

It is also known that Google has been struggling to create a fee cut plan that exceeds Apple’s level. Apple was greatly criticized for being “pattern only and both security” because it does not offer a fee cut if it exceeds 1 million won in annual sales.

In addition to the fee reduction plan, Google is expected to announce a win-win plan to prevent app developers from passing on the increased fee burden to users by implementing in-app payments. Google announced last year that it will run a’K-reate’ program worth 100 million dollars (approximately 150 billion won).

Google said, “We are discussing a plan to cut fees, but there has been no official confirmation yet.”