Google to Charge Developers 11% Service Fee for Use of Alternative Billing System in South Korea
Google has announced how it plans to comply with a new South Korea law that forces app stores to allow third party payment systems.
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.
Unfortunately, Google doesn’t plan to let developers circumvent their service fees; rather, they will discount their typical 15% fee by 4%.
Service fees for distributing apps via Android and Google Play will continue to be based on digital sales on the platform. We recognize, however, that developers will incur costs to support their billing system, so when a user selects alternative billing, we will reduce the developer’s service fee by 4%. For example, for the vast majority of developers who pay 15% for transactions through Google Play’s billing system, their service fee for transactions through the alternate billing system would be 11%. As another example, certain categories of apps participating in our Media Experience Program, such as an eBooks provider, will pay a 10% service fee for transactions made via Google Play’s billing system, but only 6% for transactions on an alternative system.
It’s unclear how Google plans to collect its 11% service fee if the transaction takes place through a third party payment system. The company says it will provide more details “in the coming weeks and months ahead”.
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