On Friday, Sept. 2, search giant Google announced that it launched a pilot program for apps to offer customers several payment options on Google Play Store.
The pilot program for the alternative billing system for in-app purchases is available on Android devices in Europe, India, Australia, Indonesia, and Japan.
Google's New Alternative Billing System
According to The Guardian, Google's alternative billing system will reduce the service fee of non-gaming app developers by 4% if a customer chooses the alternative billing system when checking out.
Normally, Google gets 15% from the first $1 million revenue developers make annually. Then, the search giant charges 30% of developers' first $1 million in earnings annually.
How to Qualify for the Alternative Billing System
According to Google, non-gaming app developers need to meet certain requirements and eligibility to join the pilot program of its new alternative billing system.
To be eligible for the pilot program, the developer must be a registered business and only offer alternative billing systems within Google Play Store.
The developer must also comply with the Payment Card Industry Data Security Standard or PCI-DSS, and customer support should be ready for users of the alternative billing system.
The developer must also provide a process to dispute unauthorized transactions through the alternative billing system.
Also, developers must notify Google if they intend to change their app enrollment preferences, like disabling or enabling user choice billing in a particular app or country.
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The changes made on the app enrollment preferences will be effective on the first of the following month, so if a developer makes changes in mid-September, the effectiveness will apply on Oct. 1.
Approved participants in this pilot will still have to pay applicable service fees. When a customer chooses to use the alternative billing system, the developer's service fee will be reduced by 4%.
Alternative Billing Systems for EEA
The alternative billing system for non-gaming app developers announced on Friday, Sept. 2, is an extension of the alternative billing system for in-app purchases for users based in the 27 countries in the European Economic Area or EEA.
The EEA alternative billing system was introduced back in July.
According to TechCrunch, non-gaming app developers will get a 3% relief from the service fee they have to pay Google Play Store while processing in-app transactions in EEA countries.
Google charges non-gaming app developers 15% on their first $1 million revenue of the year, but that will be reduced to 12% if the app developer adopts a third-party payment system for EEA customers.
Since the European Parliament passed the Digital Markets Act or DMA in July, tech giants like Google have been forced to follow fair and open market practices.
In a blog post, Google said that the new act would for Google Play and other industry players to adjust their operating model for users in the EEA.
Tech companies that fail to comply with the new rules set by the DMA can face a fine of up to 10% of their global revenues, and the penalties can increase to 20% of the tech company's global revenue in case of repeat offenses.
What Countries are Included in the EEA?
The EEA includes Austria, Bulgaria, Cyprus, Belgium, Croatia, the Czech Republic, Denmark, Finland, Estonia, France, and Germany.
The EEA includes Iceland, Greece, Hungary, Ireland, Italy, Liechtenstein, Latvia, Luxembourg, Lithuania, Malta, Norway, Netherlands, Poland, Romania, Portugal, Slovenia, Spain, Slovakia, and Sweden.
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Written by Sophie Webster
