South Korean app developers and content providers are increasing their paid subscription and service fees in the Google Play Marketplace due to the hefty 15-30% commissions now required following Google’s policy changes that require apps to use its first-party billing and payment system. Although South Korean law allows app developers to use a third-party payment option, it only reduces Google’s commission by 4% – and that is not enough, think the developers. Developers are also frustrated that they can’t add links pointing to their own website in their app, which would allow their users to buy directly, bypassing Google billing entirely.
Many South Korean non-gaming platforms, such as over-the-top (OTT), music streaming, web cartoon, and e-book apps have mainly embraced web payments via an embedded link to a external website. They preferred this system because the pay-per-web-link option does not require commission fees from app developers and Google’s in-app payment was not required for apps other than games until the end of May this year, sources familiar with the situation said. But from June 1, these platforms must use Google’s in-app payment or third-party payment option.
According to the American technology giant Blog, “all developers selling digital goods and services in their apps are required to use Google Play’s billing system,” and clarified that apps using external payment links will be removed from the Google Play Store, starting from in June 2022to comply with Google’s payment policy.
This follows Google’s earlier decision to support third-party payments in South Korea. Google said in November last year, it would support alternative billing systems in South Korea under the National In-App Payments Law – the first of its kind in the world – by allowing Android app developers to use alternative payment options alongside Google after South Korea passed a bill that prohibits app market operators like Google and Apple from forcing apps to use the giants’ own in-app payment systems technology in September.
According to the statement released by the Korea Communications Commission in early April, banning app developers from using the pay-per-web link option would violate South Korea’s app payment law, which requires app store operators to allow third-party payments. The KCC told TechCrunch that it will retain surveillance Google asks whether the US tech giant is forcing apps to use Google’s own payment system in the Google Play Marketplace for Android app users in Korea and whether it’s removing apps for using pay-per-link website.
South Korean webtoon platforms – Naver Webtoon and Kakao Entertainment – recently stated that they increase their contribution rate when users download their apps and services. But the two webtoon companies won’t increase their fees for transactions made through the web, as Google’s billing policy only affects in-app payments.
More and more content providers, including over-to-top platforms, e-books and music streaming apps, are set to raise their service fees in South Korea.
Over-the-top (OTT) platforms like Korean telecommunications company Wave from SK Telecom, CJ ENM TV and Seezn by KT increased their subscription fees by around 16.7%, while music streaming services such as Naver’s Vibe and SK Telecom’s Flo also increased their service fees by around 16%.
Google declined to comment.