“PCI requests the Indian government to bring in amendments to existing laws to save and protect Indian Startups, RBI regulated payment aggregators (PAs) from Google‘s abusive and monopolistic policies just like South Korea and the European Union,” said Vishwas Patel, chairman, Payments Council Of India and joint managing director, Infibeam Avenues which runs payment gateway CCAvenue.
South Korea passed an amendment to its telecommunications business act in 2022 and the European Union is implementing the Digital Markets Act to protect its local startups from Big Tech’s abusing their monopoly, he added.
With multiple startups removing their payment gateway from their Android applications to shift transactions from in-app to their websites to comply with Google’s policies, the digital payment industry is fearing major impact on transaction volumes.
“A category of merchants into virtual services, virtual goods, online education are deactivating our payment gateways on their Android apps so that they don’t have to pay any money to Google. This will lead to reduction of real time payment transactions,” Patel said.
He further added that Google is clearly abusing its dominant monopoly of its android operating system on mobile phones in India.
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The issue came to a boil on Friday when Google started delisting multiple large consumer internet firms from the Android app store saying that they have violated Google’s payment policies.Over the weekend Google started getting many of these apps back on the Play Store, but only when they removed their payment functionalities from the platform altogether to abide by Google’s norms.
Payment industry insiders said that this could impact digital payment volumes, since drop offs could shoot up and customer conversion will be impacted. In many cases consumers might not hop from the app to the website to purchase a service.
“Google is clearly abusing its dominant monopoly of its Android operating system on mobile phones in India. Many of our members at PCI are RBI regulated entities holding Payments Aggregator licence to provide payment gateway services to Indian merchants for their in-store, website, apps etc through a single merchant account,” Patel added.
The payments industry expects disruption because of this move.
“If the CCI (Competition Commission of India) rules are implemented then more apps could use PGs instead and drive volumes but that is far away,” said a founder of one of the largest payment firms on the condition of anonymity.
To fight Google’s pricing mandates, the CCI had asked Google to offer multiple payment options back in 2022. Google was initially mandating in-app purchases through its own payment platform for which it would charge commission between 15 and 30%.
Additionally, when the government is offering Unified Payments Interface and RuPay debit card payments at zero cost for merchants, these app publishers are feeling the pinch, another senior industry executive said.
Patel further pointed out that Google offers user choice billing but two equal choices have to be offered to end consumers, now Google’s own Play Store billing system charges 15% of transaction amount and if the user chooses any of the other payment gateway, then Google charges 11%.
The executive quoted above pointed out that compared to the larger digital payment volumes, the transactions generated by these merchants would be small, but it remains a significant share of the industry.