Google to Allow Alternate Payment Systems in South Korea

In a stunning example of how regulatory action can drive major change in Big Tech, Google will comply with a new South Korean law and allow developers who target its Android-based Play Store to use alternative—e.g. non-Google in-app payment (IAP) systems. Of course, there’s a major asterisk to this victory: it will only do so in South Korea.

But then that’s why regulatory action is so important: If bigger markets like the United States and the European Union enact similar laws, Google will have to comply in those regions as well. And at that point, it will need to accept the inevitable and allow developers to use the payment systems they prefer, everywhere, instituting a new generation of competition and lower prices.

Here’s how we move forward.

“We respect the decision of the [South Korea] 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,” a Google statement reads.

As you may recall, South Korea proposed this new law in August and then ratified it in September. And then, in a semi-related move, it fined Google $177 million for antitrust violations later in September for good measure: Google, it said, is abusing its market dominance by restricting competition in the mobile OS market.

South Korea is a tiny market, but it happens to be the home of Samsung, its biggest Android partner by far and the world’s largest maker of smartphones. So simply shutting off the Google Play Store in that country wasn’t an option, a move one must imagine the online giant would have otherwise considered. (After all, it shut down Google News in several countries that required it to negotiate payments to the news sources it steals from.)

As always, any step forward is considered progress, and this is not the first step to a more equitable future in mobile. In late October, Google also agreed to lower most of its developer-related Play Store fees, and dramatically, in response to numerous lawsuits around the globe.

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  • VMax

    Premium Member
    04 November, 2021 - 8:46 am

    <p>"<span style="color: rgb(0, 0, 0);">South Korea is a tiny market" – in a geographic sense, most certainly, but surely 50 million people (and I suspect a very high rate of smartphone ownership and turnover) isn’t a tiny market!</span></p>

  • Travis

    04 November, 2021 - 9:51 am

    <p>Is apple not impacted by this?</p>

    • madthinus

      Premium Member
      04 November, 2021 - 10:56 am

      <p>Yes, they will be.</p>

  • Donte

    04 November, 2021 - 11:57 am

    <p>"<span style="color: rgb(0, 0, 0);">instituting a new generation of competition and lower prices."</span></p><p><br></p><p><span style="color: rgb(0, 0, 0);">Considering 99% of my apps are free and those that are not are $5 or less, I highly doubt consumers will see any difference. This is about the developers maximizing their profits. Which is fine. </span></p><p><br></p><p><span style="color: rgb(0, 0, 0);">I however do not want another account through another payment system. If an app does not allow me to pay through the app store that app is in (Google, Apple, Microsoft, Sony etc) or tries to charge me more for the app if a buy it from said app store…..I will simply say no to that app. I like my walled gardens.</span></p>

  • pungkuss

    04 November, 2021 - 5:23 pm

    <p>This is funny! Sounds like google is saying that they will reduce the fee by 4% if developers choose an alternate payment system. Lets say I pay Google 30% today and chose to use an alternate payment system, I will pay Google 26% plus develop/pay for another alternate payment system? This will end up being worse that the 30%. LOLOL See they are following the letter of the law by allowing a new payment system, but not the spirit. This is hilarious! These companies are gonna make their money. You pass a law they will just charge for stuff they were not charging for before. Sundar has being saying quite often that the Playstore pays for android. That is code for if they cant make the money from the Playstore thru IAP then they are gonna make if from the OEMs who are gonna pass it on to the consumer.</p>

  • rbgaynor

    04 November, 2021 - 5:27 pm

    <p>Google is also going to charge those developers who use their own payment system 11% of those charges instead of the 15% if they process it through the Play Store – not exactly the big win people are thinking.</p>


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