Google to reduce service fee to 15% on all in-app purchases through Play Store

Google will reduce service fee from 30% to 15% on all in-app purchases through the Play Store, the search giant said in an official blog. According to Google, it will reduce the service fee to 15% from the proposed 30% for the first $1 million of revenue every developer earns each year starting on July 1, 2021.

“While these investments are most critical when developers are in the earlier stages of growth, scaling an app doesn’t stop once a partner has reached $1M in revenue — we’ve heard from our partners making $2M, $5M and even $10M a year that their services are still on a path to self-sustaining orbit. This is why we are making this reduced fee on the first $1M of total revenue earned each year available to every Play developer that uses the Play billing system, regardless of size,” said Sameer Samat, vice president of Android and Google Play, in a blog post.

Google will continue to levy a fee of 30% if a developer on the Play Store generates more than $1 million in revenue in a year. 

The development comes soon after Google simplified its Play Store policies on gamified loyalty programs in January. Google had already faced repercussions from the Indian startup ecosystem over its policy to enforce a 30% charge on all in-app purchases through the Play Store in India. 

Following the backlash, it later extended the deadline to integrate the billing system from September 30, 2021, to March 31, 2022.

In the latest update on Tuesday, Google has also clarified that the developers in India that do sell digital goods but have not yet integrated with Play Store’s billing system can integrate until March 31, 2022. It further added that the developers in India that are already using Play Store to sell digital goods, can start receiving the benefit of this change as soon as it goes into effect in July.

To recall, Paytm and Paytm First Games apps were removed from the Play Store for flouting its Play Store policy on gambling platforms in September 2020. During the same month, Google also sent notices to online food ordering platforms Zomato and Swiggy for violating its policies. The two companies had to withdraw their in-app gaming feature for promoting cashback schemes via fantasy sports.