Google has been accused of pressuring application and mobile game developers into using its in-house payment service, Google Wallet, as the search giant tries to emulate the financial success of Apple's iOS platform.
Google warned several developers in recent months that if they continued to use other, often cheaper, payment methods - such as PayPal, Zong and Boku – that their apps would be removed from Android Market, now known as Google Play, according to developers, executives and investors in mobile gaming and payment sectors.
Google's payment service charges a higher cut per transaction than some rivals', suggesting Google is using its powerful position in the mobile apps market to promote an in-house offering.
It's probably naive of developers to think they could keep choosing different payment providers
In one email sent to a developer in late August – seen by Reuters this week - Google said the developer had 30 days to comply, otherwise the developer's apps would be "suspended" from Android Market.
"Google told people that if they used other payment services they would be breaking the terms of use," said Si Shen, founder and chief executive of Papaya, a social gaming network on Android. "Whether it's right or wrong, we have to follow the rules."
Papaya placed social games on Android more than two years ago. At that time, the search company's payment service - now known as Google Wallet - was not available for Android app payments, Shen explained.
She said Papaya used PayPal, owned by eBay, and Zong, a mobile payments company that has since been acquired by eBay. Papaya has now dropped PayPal and Zong in favour of Google Wallet for in-app billing, she said.
"If we had a choice, the freedom to choose which billing service, then that's even better. But if we have to follow the rules, we will," she added. "I want to maintain a very good relationship with Google. We are very collaborative. It's very important to the business."
Simpler process
The initiative is important for Google. While Android Market has been a hit in terms of the number of smartphones using the platform, there has not been a commensurate increase in purchase activity by users.
This is partly because the buying experience has been varied and confusing for users, experts said, reducing the chance that Android users will go through with a purchase.
By pushing all app developers to use Google's payment system, the experience should be simpler, increasing conversion.
"On Android it used to be laissez faire - you could use any payment provider you liked," said Todd Hooper, chief executive of Zipline Games.
"It's probably naive of developers to think they could keep choosing different payment providers," he added. "If purchasing on Android is all over the place, that is worrying."
Apple's iOS platform generates higher conversion rates mainly because the company required developers to use its own payment system from day one, according to Hooper.
