KUALA LUMPUR, July 22 ― First, Spotify and Netflix. Then, it was Epic Games with their battle royale cult favourite, Fortnite. And now, Tinder is the latest high profile app to voice out discontent at the tax that is levied on app makers by Google and Apple for payments made through the Play Store and App Store respectively.
The dating app has launched a new payment process that bypasses the Google Play Store for payments on Android devices—instead, payments made for premium services can now be made with credit cards directly in the app. This marks a change from the standard payment system, where recurring subscription payments for Tinder would be be run through the Play Store, netting Google a percentage of the revenue.
Tinder, which is owned by Match Group (they also own dating services OkCupid and Match.com), earned a record US$275 million (RM1.13 billion) last year alone. It’s basically turned into a cultural phenomenon. But this means that Google stands to lose a significant amount of revenue, with the tax going up to around 30 per cent for most apps.
Not very popular
The 70-30 profit share system that was first implemented by Apple in 2008 and followed by Google soon after, is a system that has drawn criticism from major players in the market. Spotify and Netflix have both been opened in their disdain for the tax, while Fortnite isn’t even available on the Google Play Store.
The tax is begrudgingly accepted by most companies, particularly iOS where you get Apple’s quality control and ecosystem benefits. For example, Epic Games did bypass the Google Play store, but still released Fortnite on iOS through the App Store. Android, on the other hand, is more open and therefore more flexible with regards to developer options.
As for now, it will certainly be interesting to see how other popular apps react to Tinder’s move. Google will stand to lose a whole lot more than a cut of Tinder’s revenue if other apps follow suit, for sure. ― SoyaCincau
