Who hates to lose 30% of your earning to fees, taxes and the likes? Tinder obviously does and is avoiding it by taking direct payment instead. Store app fees can really kill a business, especially when it cost 30% of your total earnings. Match Group has released a direct payment switching option for old and new users after which it’s impossible to switch back to paying through Google Play.
Justine Sacco, a spokeswoman from Match Group which owns Tinder, likens the release of this new default payment as an ‘experiment’ in their effort to bring new features that will enhance users’ experience. Google hasn’t commented on the issue, yet, although this move is not unfamiliar.
Giant companies who over services at very low-cost experience a tremendous loss with app stores taking up 30% of apps’ revenue (and then 15% after the first year). This means that apps like Spotify only get $7 per month despite their subscription price at $7. By giving direct payment options, these apps gain more while remaining on Google PlayStore.
It’s also highly unlikely that these stores will pull out popular apps because they broke the requirement. Tinder has 100m downloads and Spotify has 500m downloads on Google PlayStore alone. Over ten million people are active on the platform, swiping and matching with other users across the town, state, and even countries.
Tinder Plus subscription currently costs $9.99 a month and Tinder Gold starts at $14.99 a month. Because Tinder is no more a new app, Google takes 15% of their revenue, which means Tinder only gets $8.5 from Plus users and $12.75 from Gold users. Developers have to either cover the price or mark it up to cover for the fees, both of which aren’t good for business. And if they have other ways to do this, they are willing to take that path once their position is strong enough on Google PlayStore.
Companies have also felt unfair in the competition of offering the same service on the same platform, but not given the same advantages. Apple Music, for example, is not charged because they are own by Apple, but Spotify has to pay extra $1.5 per user and that’s $150 million to pay every month when Spotify has 100m subscribers.
At the extreme that the apps become unavailable on Google, they might take the same steps as Epic Games did with their Fortnite game. After releasing on Switch and Apple, the company en route in releasing the game for Android users, which is not through Google PlayStore, but by downloading the launcher on their website. While they don’t have a choice with Apple, they did have freedom with Android and developers are very likely to use this freedom to avoid having to pay hundreds of millions of dollars to the app store.