If you are selling digital goods and other services through Google Play Store, there is good news for you. Your income will increase by 15% from July 1, 2021. Yes, you read it right. Google is reducing play store commission from 30% to 15%. Recently, App Store also reduced service charges to woo more creators. Experts believe that Google reduced the service charges due to Apple’s earlier move.
Google, the Andriod owner, released the statement on Tuesday that Google Play Store is bringing new service charges that are 15% less than the earlier commission. Currently. Play Store cut 30% earnings on its platform as service charges.
A recent reduction will not be applied if you earn more than $1 million from Play Store. That means if your earning crosses $1 million, the company will charge a 30% commission on every dollar earned above $1 million.
How will Current Service Charge Reduction Help the Developers?
As per Google’s estimation, the current commission reduction will help 99% of developers that sell digital goods and services on the Play Store. Google also revealed that 97% of apps available on the Play Store don’t pay any service commission due to no earning.
App Store has slightly different service charges condition. Apple released the statement that it will charge a 15% service fee if earnings are less than $1 million. If a developer’s earning crosses $1 million, a 15% cap will not be applicable in such a situation. That developer has to pay a 30% commission on all earning, whereas Play Store will charge a 30% commission on the money earned above $1 million.
Talking about the recent changes, Sameer Samat, VP of Google Play and Android, said:
“We’ve heard from our partners making $2 million, $5 million, and even $10 million a year that their services are still on a path to self-sustaining orbit,”
He further added:
“This is why we are making this reduced fee on the first $1 million of total revenue earned each year available to every Play developer that uses the Play billing system, regardless of size. We believe this is a fair approach that aligns with Google’s broader mission to help all developers succeed.”
The recent Google Billing System brought lots of losses to Indian Startups. These startups were demotivated due to the hefty service charges cut by the Play store. Google understood the situation and helped this startup through this latest commission reduction news.
More than 150 startups banded together last year after Google said it will collect as high as 30% cut on in-app purchases in a range of categories made by Android apps.
Indian Startups criticized Google for such harsh billings. Google discussed the situation with many Indian firms and finally concluded that billing systems have to change.
Why are Indian Firms still not Happy with Google?
Some of the Indian firms are still not happy with Google’s move. They are calling it a “PR stunt”. Paytm CEO Vijay Shekhar Sharma, while talking with TechCrunch, said:
“Established firms will still have to pay an exorbitant amount of fee to Google. Today’s announcement by Google further raises the question whether Google plans to address concerns raised by serious internet firms at all.”
He further said:
“They are basically saying that as soon as you build a business larger than $1 million — which is a very low bar — you are going to pay a 30% fee, which after taxes, becomes 44%.”
It should also be noted that Google Play and Paytm’s business war is on since the time Play Store banned a few Paytm apps for not following the store guidelines. later Paytm decided to launch its own app store to compete against Google.
Sharma heavily criticized Google and also asked google to solve real issues developers are facing due to the Play Store monopoly.
He further added:
“We don’t have any other operating system or distribution platform. They effectively control the destiny of every app developer in the country. Earlier India was powered by Android, then we became dependent on Android, and now it is controlled by Android.”
Answering a question related to other issues raised by the developer community of India, Google’s Samat said:
“We look forward to seeing more businesses scale to new heights on Android, and to further discussions with the Indian developer community to find new ways to support them technically and economically as they build their businesses.”
Android controls 99% smartphone market in India, as per the Counterpoint research finding. said Sharma.
