Even as Indian startup founders took to social media to express their concerns over Google’s Play billing system, Internet and Mobile Association of India (IAMAI) said it will call for a meeting of founders to address the issue.
Many founders believe that India needs a local app store to provide more choice to consumers.
On Tuesday (September 29), Google said that it plans to enforce its policies that will require app developers selling digital goods on the Google Play Store to use its in-app payment system, which takes an industry-standard 30% cut of transactions.
In a statement, industry body IAMAI said the Indian founders’ community is concerned after the announcement.
“The primary likely reason is the perceived dominance of Google Billing System. As a payment aggregator, currently unlicensed but soon to be licensed in India, Google Billing System can choose which payment instruments it would work with and which ones it would not. The new draft RBI guidelines on payment aggregators, too, allows for that freedom,” it said.
The compounding factor for many founders is the current revenue sharing policy of the Play store, Internet and Mobile Association of India (IAMAI) added. “Just because Google owns the gate and the gateway to the digital ecosystem of this country, they should not act arbitrarily and enforce their rules and regulations which are contrary to our country’s laws.”
Expressing his concern Vishwas Patel, Founder, CCAvenues and Chairman of Payments Council Of India, tweeted “Just because Google owns the gate and the gateway to the digital ecosystem of this country, they should not act arbitrarily and enforce their rules and regulations which are contrary to our country’s laws,”
IAMAI added that for many founders of Indian startups, this brings back fears of the deeply problematic revenue share model between VAS service providers (mainly digital goods) and telecom operators, “Telcos took up to 70% revenue share from VAS companies on the pretext of discovery, marketing, collection. In India, 98% of people use mobile internet, more than 90% of people use Android phones which gives Google control over many layers between customers and their service providers,” IAMAI said.
IAMAI said it will call a meeting with its founder members to understand their concerns and to resolve them.
Meanwhile, Arvind Gupta, Founder Member of iSPiRT, tweeted, calling the move as a digital monopoly and added “30% GateKeeping fees. Startups and consumers have very little choice.”
Razorpay CEO and co-founder Harshil Mathur tweeted that India needs a local app store. “India needs a local app store long term else 30% tax will eat up most businesses, is anyone trying to build one?” he said.
Founder of fintech startup Cred Kunal Shah tweeted, “Like gaming maybe dating and education apps may soon get off app stores and get users to ‘side load’ in hopes to save costs.”
Google, in its blog post on Tuesday, highlighted that the policy applies to fewer than 3% of developers with apps in the Play Store. The company added that they only charge the service fee if the developer charges users to download their app or they sell in-app digital items.”…we think that is fair,” product management vice president Sameer Samat said in a blog post published on Monday (September 28).
The polices, which will be effective from January 20, 2021, highlighted that Google Billing system will not be applicable for purchase or renting of physical goods, purchase of physical services and remittance in respect of a credit card bill or utility bill. Besides this, peer-to-peer payments, online auctions, and tax-exempt donations will not be covered by the policy, along with content or services that facilitate online gambling.