App developers and content providers in South Korea are increasing their fees for paid subscriptions and services on the Google Play marketplace, as higher commissions of 15-30% are now required after Google’s policy change, forcing apps to use their own first-party billing and payment system.
While South Korean law allows app developers to use third-party payment methods, this only reduces Google’s commission by 4% — and that’s not enough, developers are also frustrated that they can’t add pointers to themselves within their apps links to websites, which would make it difficult for their users to completely bypass Google’s billing.
Many Korean non-gaming platforms, such as over-the-top (OTT), music streaming, online cartoons, and digital book apps, initiate online payments mainly through in-app links to external websites. Sources familiar with the situation said they preferred such a system because the web link payment scheme does not require app developers’ commission fees, and Google’s in-app payments will not be mandatory for non-game apps until the end of May this year. But starting June 1, those platforms will have to use Google’s in-app payments or third-party payment options.
According to the Google blog, “all developers selling digital goods and services in their apps are required to use Google Play’s billing system.” The company also clarified that starting June 2022, apps using external payment links will Google Play Store removed to comply with Google’s payment policy.
Previously, Google earlier decided to support third-party payments in South Korea. Google said in November that it would meet South Korea’s in-app payments regulations, the world’s first law to provide in-app payment options by allowing Android app developers to use Google’s own payment methods. Meanwhile, support for an alternative billing system after South Korea passed a bill in September banning Google and Apple app marketplace operators such as
Banning app developers from using web link payment options would violate South Korea’s App Payments Act, which requires operators of app stores to allow third-party payments, according to a statement released by the Korea Communications Commission in early April. The Korea Communications Commission said it will continue to monitor Google to see if it forces apps to use Google’s own payment system on the Google Play market for Android app users in South Korea, and if it removes apps that use web links to pay.
South Korean webtoon platforms – Naver Webtoon and Kakao Entertainment – recently said they would increase the fees they charge when users download their apps and services. But the two webtoon companies won’t raise fees for transactions over the web, because Google’s billing policy only affects in-app payments.
More content providers, including over-to-top platforms, digital books and music streaming apps, are preparing to raise their service fees in South Korea.
OTT platforms such as South Korean telco SK Telecom’s Wavve, CJ ENM’s TVing and KT’s Seezn raised their subscription fees by around 16.7%, while music streaming services such as Naver’s Vibe and SK Telecom’s Flo also raised service fees by around 10%. 16%.