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Leading fintech startup Paytm is at loggerheads with technology giant Google after its payments app was taken off Google Play Store citing violations
Leading fintech startup Paytm is at loggerheads with technology giant Google after its payments app was taken off Google Play Store citing violations

Paytm launches its own mini app store

  • Paytm’s move is perhaps a direct fallout of Google mandating that developers listed on its Play Store use its billing service

BENGALURU : Digital payments firm Paytm has launched a mini-app store to support Indian developers, in a direct challenge to Google’s dominance in the space.

The launch of the store follows the payment app being temporarily removed from Google’s Play Store on 18 September for violating developer guidelines on real-money gaming.

While the removal of the app may be a trigger, Paytm’s move is perhaps a direct fallout of Google mandating that developers listed on its Play Store use its billing service. Google levies a 30% commission on any transaction made for a digital product or service through its in-app billing system.

Paytm said the mini-app store will help developers take their products to the masses and is providing listing and distribution of these mini-apps within its app. Rival PhonePe launched its in-app platform in June 2018 and rebranded it to PhonePe Switch in October 2019.

More than 300 apps, including Decathlon, Ola, Rapido, Netmeds, 1MG, Domino’s Pizza, FreshMenu, NoBroker, have joined the Paytm app store, the company said.

Last week, startup founders such as Paytm’s Vijay Shekhar Sharma and Razorpay’s Harshil Mathur, along with 50 other founders, discussed the possibility of building an Indian app store to challenge Google.

In a separate move, industry body Internet and Mobile Association of India (Iamai), which has many startups as members, sought a collective strategy to tackle the issue. In a note on 29 September, Iamai said it is seeking a meeting with its founder members to understand their concerns and to resolve them.

“Just because Google owns the gate and the gateway to the digital ecosystem of this country, they should not act arbitrarily and enforce their rules and regulations that are contrary to our country’s laws," said Vishwas Patel, founder of CCAvenue and chairman of Payments Council of India and a member of Iamai. “Google’s stand in courts is that it does not need RBI authorization as it is not a payment system operator and, here, it is mandating that Indian apps use only Google’s proprietary billing and payment systems. Google should not exercise its dominant position, rather allow a level-playing field for everyone," he added.

“India needs a local app store long-term, else 30% tax will eat up most businesses; is anyone trying to build one?" Mathur of Razorpay said on Twitter last week.

Payments Council of India founder Patel said in the 29 September note that Google’ can’t “force" Indian developers to use Google billing and charge a commission for it.

The Indian developers plan to lobby the government and come up with an alternative to Google. In fact, business channel ETNow reported last week that the government is planning to ramp up its Mobile Seva app store, which has mostly catered to MSMEs, to act as an alternative to Google and Apple’s platforms.

The government is reportedly planning to make the Mobile Seva app store mandatory on all smartphones. Paytm recently listed on the store, which mostly has government apps.

In the absence of any legal means, the government will have its work cut out for making a viable alternative to Google and Apple, experts said.

“Other app stores have not been able to catch up with Google Play because they lack network effects. Google’s Play Store is mandatory to make use of Google Mobile Services, that includes other apps such as Google Maps," Manjunath Bhat, senior director analyst at Gartner, told Mint last week.

On 29 September, Google said, “Play distributed apps must use Google Play’s billing and revenue sharing system as the method of payment if they require or accept payment for access to features or services, including any app functionality, digital content or goods. This applies only to apps and has been purportedly done to prevent revenue leakages to Google from Google Play from January 2021."

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