[Pangyo Tech] Google and Kakao’s ‘In-App Payment’ Clash

Google and Kakao’s battle of nerves over the app marketplace’s “in-app payment” is heating up.

As of the 1st, Google has ceased to provide the latest updated version of the KakaoTalk application in its app marketplace. This is because Google claims Kakao has violated its in-app payment policy. The issue was that Kakao had been promoting external payment links within the Google app marketplace, saying, “If you click here and pay, you can use emoticon subscription services at low prices.”

For now, Kakao will continue promoting external payments regardless of Google’s measures. The latest KakaoTalk version will be provided through the portal site Daum. According to the IT industry, “This is possible only because Kakao is the number one national messenger service and has secured 50 million users.” According to an official from Kakao, “This was to provide options by informing users of alternative payment methods other than in-app payments.”

If the tension between Google and Kakao continues, the possibility of the KakaoTalk application being deleted from the Google app marketplace cannot be ruled out. Although this may not be applicable to iPhone users or Android smartphone users using One Store and Galaxy Store, if KakaoTalk disappears from Google app marketplace, which accounts for more than 70% of domestic apps, user inconvenience and confusion will be unavoidable.

From the 1st of last month, Google started its policy of compulsory in-app payment, which receives up to 30% of commission fees for in-app payments. Applications that do not use Google payments or third-party payments allowed by Google will be withdrawn from the marketplace. Furthermore, they prohibited inclusion of phrases or external links that promote alternative payment methods. Prior to the implementation of Google’s policy, from April to May, companies of the domestic IT industry such as Kakao, Naver, and Wavve etc. and the digital content industry have increased their fees for paid products to match the range of commission fees.

Until the 1st of last month, d-day of implementation of Google’s policy, companies advertised through notices inside of their apps saying, “If you pay through our website, you can purchase at existing prices.” Since the end of May, Kakao has also advertised that Kakao emoticon subscriptions and TalkDrawer(data storage) services could be purchased at up to 30% cheaper prices and has placed external links that lead directly to payment websites within the Google app marketplace.

Source: Pangyo Techno Valley Official Newsroom