Google on Friday denied reports that it has been pressuring mobile app and game developers to use only its in-house payment system for purchases made through the new Google superstore, called Google Play. The company is now saying that its previous policy remains unchanged.
According to reports on Thursday, the technology giant told several developers recently that other payment methods in the store, such as PayPal, Zong, or Boku, were not allowed, and that their continued use could lead to those developers' apps being removed from the Google store.
E-mail to Papaya
Reuters news service had reported the warning to developers, which it said was part of Google's efforts to streamline purchases in its new store, now called Google Play. Google's in-house payment method, called Google Wallet, extracts a larger cut for each sale -- typically 30 percent -- than some competing e-commerce systems.
Papaya said that when it first released its Android-based social games more than two years ago, Google's payment service was not available, so it used PayPal and then moved to Zong, both of which were owned by eBay.
Google said that its policy remains the same as the one it instituted in March of last year. That policy requires that in-app purchasing of app-related content be done through Google's in-house payment system, and that the e-mail could simply have been a warning to Papaya that it needed to continue doing so. For in-app purchases for outside products or services, such as a hotel booking, the developer can use the purchasing mechanism of their choice.
Earlier this week, Google announced it was consolidating its various online retail outlets -- Google Music, Google eBookstore, and the Android Market -- into one Android-based Google virtual superstore, called Google Play.
Just as Google has now unified its brand to compete with Apple's iTunes and Amazon, observers speculated the company was similarly attempting to unify its payment system. Apple only allows payment in iTunes through its e-commerce system.
Google executives have said publicly that, while the number of Android smartphones was rapidly increasing, the number of purchases through the Android Market was not keeping pace, and that one of the obstacles in the Market appeared to be that the buying experience had too many choices.
The term Google Wallet has also been used to apply to mobile device-based purchasing via a few Android phones, using near field communication technology at brick-and-mortars retailers. But, in this case, Google Wallet refers only to the Google Play store online purchasing.
"Google is terribly confusing on this," said Avi Greengart, an analyst at Current Analysis, "and it needs to straighten things out," both for developers selling apps via Google Play and for retailers who are considering the mobile Google Wallet.
Posted: 2012-03-13 @ 3:15pm PT
Google is exploiting its monopolistic status as the sole payment processor on its app market by charging its developers a 30 percent processing fee, which is precisely what Apple and Facebook are doing. It is truly amazing how these companies can get away with charging such astronomically high fees. I can't even imagine what people will say about us (and to us), if we even tried to charge our merchants anything remotely close to that rate.