Google Enables Alternative Billing System in South Korea

Google plans to continue charging South Korean app developers a service fee for in-app purchases, even as users for the first time globally can choose to use third-party payment platforms rather than Google’s, The Wall Street Journal reported. In an announcement, Google outlined how it plans to comply with a South Korean law that took effect in September.

According to The Wall Street Journal, it was the first bill challenging Google’s and Apple’s dominance over how apps on their platforms sell their digital goods – and offered, in theory, a way for developers to lower commissions and cut prices for consumers.

The Google Developers blog posted “Enabling alternative billing systems for users in South Korea”. It was written by Senior Director of Public Policy, Wilson White.

Here are some key points from the Google Developers blog:

  •  In response to the recent legislation, developers will now be able to add an alternative in-app billing system, alongside Google Play’s billing system, for their mobile and tablet users in South Korea. At checkout, users will be able to choose which billing system to use.
  •  We work hard to keep users safe and maintain the experience they have come to expect from apps and games downloaded from Google Play. Alternative billing systems may not offer the same protections or payment options and features of Google Play’s billing system – such as parental controls, family payment methods, subscription management, Google Play gift cards, and Play Points.
  •  In this year alone, more than 1.5 million users in South Korea have used Play Points, collectively accruing over 20 billion points in their accounts, which they are unable to use on alternative billing systems. South Korean consumers value these features of Google Play’s billing ecosystem, and we believe it’s critical to continue to offer them the choice to use Google Play billing if they desire.
  •  97% of developers don’t sell digital content and are not subject to any service fee for having their apps displayed in the Play Store…. For the remaining 3% of developers who do sell digital content, we’ve tailored our fee structure with different programs to meet different businesses’ needs, so that 99% of developers qualify for a service fee of 15% or less.

My understanding of this is that Google acknowledges the new South Korean law and intends to comply with it by giving developers and game players the ability to use an alternate payment system instead of Google Play. However, Google’s explanation appears to be an effort to dissuade people from using anything other than Google Play’s payment system.