South Korea has become the first nation in the world to ensure that Apple Inc (NASDAQ: AAPL) and Google, Alphabet Inc Class A (NASDAQ: GOOGL) open up their app payment systems to other payment gateways. To back this move, The National Assembly passed a bill on Tuesday. The bill bans the app stores from requiring developers to use their respective in-house payment systems. Instead, it gives customers the option to pay using other payment gateways. Once President Moon Jae-in signs the bill, it will become law.
Apple and Google charge a fee of up to 30% on purchases made
Apple and Google charge their users a fee of up to 30% for purchases made through their respective stores. Citing that users will be protected from fraud and privacy invasion, the corporate giants give no room to alternative payment handlers on their platforms. Epic Games Inc. has dragged Apple and Google to the court, arguing that the providers’ fee is unfair.
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It has come to light that the two app stores deal with payments amounting to billions of dollars every quarter. The global Smartphone era began about a decade ago. Apple and Google continue to hold on to the duopoly over commissions that the two companies share.
Income from services and subscriptions booming for Apple and Google
The app store produces annual revenue of about $20 billion, according to Sensor Tower. Meanwhile, India is proving to be Google’s potential market, considering a spike in the number of internet users in the country.
The chain of unwelcome events that takes place in the world of apps goes beyond $142 billion. Amazon.com Inc. and Facebook Inc., apart from Google and Apple, are the four companies that have, beyond doubt, built up an extensive online marketplace on which their rivals do business.
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