Google proposes to allow third party app payments in South Korea

Google announced Thursday that it plans to allow third-party payment systems in South Korea with respect to a new law that prevents major app store operators from forcing software developers to use their payment systems.

In August, parliament passed an amendment to South Korea’s Telecommunications Business Act which put a ban on the big app store operators such as Google and Apple Inc. to force software developers to use their payment systems. It effectively stopped them from charging commissions on in-app purchases. It is the first step in curbing major economies such as Apple and Google, which face global criticism for requiring the use of proprietary payment systems that charge commissions of up to 30%.

In compliance with that, and on the request of the Korea Communications Commission’s (KCC), U.S. giant Google came up with the plan of allowing the third party app payments system in South Korea. 

Then Google stated that, “We respect the decision of the National Assembly, and we are sharing some changes to respond to this new law, including giving developers that sell in-app digital goods and services the option to add an alternative in-app billing system alongside Google Play’s billing system for their users in South Korea,”

Google generally charges a 15% service fee for distributing apps, which is now planned to be reduced 11% when users choose an alternative billing system, assuming that developers will have to bear the costs to support their own billing system. Although it isn’t clear whether it will be benefiting the developers.

Google said that alternative billing systems may not provide the same security or payment options and features as Google Play’s billing systems. 

The KCC said Google’s plans will be implemented this year and will only apply to South Korea.