Google’s decision to slash by half the commission it charges from developers on Play Store has provided some relief to the Indian start-up ecosystem but not all are fully convinced.

Vishal Gondal, Founder & CEO, GOQii, said the decision by Google to bring down the commission from 30 per cent to 15 per cent was a good one. “It is a quick and a good response by Google. It makes a lot of difference to small developers. While it is a good start, other payment options are cheaper than this. Hence, Google should allow integration of alternative payment gateways and not restrict to using Google Pay,” Gondal said.

‘Using dominant position’

But others like Ritesh Malik, founder, Innov8 Coworking, told BusinessLine that Google is using its dominant and monopolistic position in the market in the mobile OS space (example, in India 96.18 per cent of all phones are android) to strip options from consumers, especially cheaper options, and forcing consumers to use unilateral solutions offered by the company at almost 12-25 times what others charge, which is outrageous. “This will only lead to higher cost of digital products in India and all of this would be offloaded to the consumers,” Malik said.

Also read: Play Store: Google slashes commission to 15%

Vijay Shekhar Sharma, Founder of Paytm, who has been voicing concern over the commission since Google first announced it in September last year said, “ “It is absolutely shocking to see Google shrugging off the issue ..shows, how Google ignores pleads made by thousands of developers in India !(sic)” Sharma tweeted on March 16. “When we are forced to use a payment system that charges 15-30 per cent per payment, it can’t be acceptable by anyone; the digital India dream must not be ransom to such monopolies,” he said in another tweet.

‘Step in the right direction’

Abhinav Pathak, Co-Founder-CEO, Perpule, said though the commission is still high at 15 per cent, it is a step in the right direction. “The high commission was creating a lot of anti-Google sentiment, if the lesser commission leads to better customer experience, it will be a good thing for Google. Although I am not fully-satisfied, and I do not have an optimum number in mind, but this makes a huge difference to the app developer ecosystem,” said Pathak

Starting on July 1, 2021 Google will reduce the service fee Google Play receives to 15 per cent for the first $1 million of revenue every developer earns each year.

“This move is likely to benefit boutique firms, individual app developers and early-stage startups. The reduced commission on the first million makes a difference and incentivises them to innovate on the platform. However, this is not going to appease large established app development companies in India that rely on Google’s services both for app distribution (Play Store) and the platform (Android),” said Manjunath Bhat, Sr Director Analyst, Gartner.

“I doubt this is the end of the story though. It’s only the beginning of many twists and turns in the delicate dance between platform innovation, democratising access to the platform and monetising platform services,” added Bhat.

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