While most Android smartphones come with their own preloaded app marketplaces, Google Play Store remains the biggest app distributor in India today. Despite the competition and third-party marketplaces allowing users to ‘sideload’ apps on their device, Google Play Store is the most reliable app platform due to its stringent regulation and largest malware scanning system. The Play Store reportedly scans over 125 billion apps daily to keep consumers safe from malicious entities.
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Google Play Store is able to fund the app ecosystem through service fees
Google Play Store charges app developers service fees of up to 15% for using their platform. This service fee only applies to developers that sell digital goods and services within their apps. Only 3% of developers in India are required to pay a service fee. The 15% service fee is the lowest among all the major marketplaces. This fee is further reduced by 4% if a user pays through an alternative billing system. Google estimates that less than 60 developers out of more than 200,000 app developers in India could pay a service fee of 15%.
Here’s what Google Play’s fee structure looks like.
| Subscription (for automatically renewing subscription products) | 15% |
| Vertical Specific Programs | 10-15% or lower |
| Annual Revenue upto $1 million | 15% |
| Annual Revenue over $1 million | 15% on the first million + 30% on any exceeding revenue |
In compliance with CCI’s October 2022 order, Google Play expanded user choice billings to all developers in India. First introduced in 2020, the Payment policy was updated following CCI’s order and brought into effect last month. There are three billing options available to developers: Google Play’s native billing system, an alternative billing system or Google Play’s user choice billing pilot, or consumption-only operation without paying a service fee.
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Conclusion
Most developers in India have already made the switch to a billing option of their choice. Now that the deadline for billing has passed, Google Play has started implementing the policy that came into play last month. The tech giant is committed to the further growth of the app ecosystem in India.
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