Google allows Android apps to use third-party payments in the EU

Android developers who distribute apps on the Google Play store can now use third-party payment systems in many European countries. The measure applies to the European Economic Area (EEA), which comprises European Union states as well as Iceland, Liechtenstein and Norway. However, the policy will not apply to gaming apps, which still need to use Google Play’s own billing system for the time being.

Google is making the move after the EU’s legislative arm, the European Commission, passed the Digital Markets Act (DMA) this month. Along with the Digital Services Act, the law is designed to rein in the power of big tech by, for instance, prohibiting major platform holders from giving their own systems preferable treatment.

The DMA isn’t expected to come into effect until sometime in 2024. However, Google’s director of EU government affairs and public policy, Estelle Werth, wrote in a blog post that the company is “launching this program now to allow us to work closely with our developer partners and ensure our compliance plans serve the needs of our shared users and the broader ecosystem.”

The move partially reverses a policy that required all in-app payments to be processed through the Play Store’s billing system. Developers who opt for a different billing system won’t be able to avoid Google’s fees entirely. However, Google will lower the service fees it charges them by three percent.

Google says that 99 percent of developers qualify for a fee of 15 percent or less. The others typically pay 30 percent. The fees Google charges would drop to 12 percent (or lower) or 27 percent, respectively, if they select a third-party billing system. Developers may end up paying around the same amount in fees anyway, depending on what the alternative payment provider charges.

Developers will also “need to meet appropriate user protection requirements,” Google says. The company plans to allow gaming apps to use alternative payment systems in the EEA sometime before the DMA comes into effect.

Google has long resisted the idea of opening up the Play store to alternative payment providers in the face of pressure from multiple sides, but the EU forced its hand in this case. The company adopted a similar measure in South Korea last year after the country passed a law requiring Google and Apple to offer third-party payments.