In late August, South Korea passed a law requiring alternate in-app payment systems in Google Play and the iOS App Store. Google today detailed what steps it will be taking to comply. 

Android phone and tablet applications distributed via the Play Store can soon surface alternate in-app (IAP) billing systems. That said, Google still wants all developers to show the first-party IAP option alongside, noting how it’s “critical to continue to offer them the choice to use Google Play billing if they desire.”

In one mockup, Google showed a news app with an open “Choose how to check out” sheet that shows Google Play and an “Example app.”

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.

Implementation details will be made available to developers in the “coming weeks and months.” This includes “instructions for submitting security and customer service verifications and a set of user experience guidelines so users can make an informed choice.”

Meanwhile, apps that use alternate billing and are distributed via Google Play will still be subject to service fees. That cut will “continue to be based on digital sales on the platform,” but Google will reduce what it takes by 4% in recognition of how “developers will incur costs to support their billing system.”

Google Play Store Korea

For example, for the vast majority of developers who pay 15% for transactions through Google Play’s billing system, their service fee for transactions through the alternate billing system would be 11%. As another example, certain categories of apps participating in our Media Experience Program, such as an eBooks provider, will pay a 10% service fee for transactions made via Google Play’s billing system, but only 6% for transactions on an alternative system.

Google argues that this is necessary to maintain Android OS development, application distribution, developer tools, and security services. These points were previously made when Google announced that Play Store subscription fees were dropping from 30% to 15%.

It also made the case today that “alternative billing systems may not offer the same protections or payment options and features of Google Play’s billing system.” Examples cited include: parental controls, family payment methods, subscription management, Google Play gift cards, and curiously Play Points

In fact, this year alone, more than 1.5 million users in South Korea have used Play gift cards. And more than 12 million users in South Korea have enrolled in Play Points, collectively accruing over 20 billion points in their accounts, which they are unable to use on alternative billing systems.

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Abner Li

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