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Google strong-arming app developers into using its mobile payment service

Marc Sanchez Mar 9, 2012

Google is all about consolidation lately. There was the much-ballyhooed combining of privacy agreements across different services from YouTube and G+ to Blogger and Gmail. Then Monday it announced Google Play, which corralled the Android Market, Google Music, Books, and Video into one place. And now the Googs wants to “simplify” how you pay for stuff on Play. The answer: Google Wallet (naturally). Reuters reports that Google sent warning letters to developers using alternate payment methods, like PayPal,  a couple months ago. The letter explained that “apps would be removed from Android Market” if developers didn’t make the switch to Google Wallet.  Now some developers are throwing a fit over the new policy, because it means Google will take a bigger cut. Where Google sees simplicity, developers see greed.

I’m sure money plays a part, but so does a term called “conversion,” which is basically the act of buying an app after clicking on it to check it out. If a user is on the fence about an app, then is told that he needs to go to another site like PayPal in order to make the purchase, there’s a chance that he might just say “fuggetaboutit.” No conversion. But if there’s a nice, integrated payment button right there on the same page, well then “ba-da-bing!” Conversion.

Apple has had a similar policy with app developers since day one, and really, that’s the big difference. When Apple comes out of the gate with a policy that skims 30% off the top, a developer might wince, but she knows the score. If you extrapolate this idea to Google’s other new policies, it’s easy to see why people are upset. The basic argument: quit saying one thing then doing another.

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