In India, Google faces its own version of Apple's Epic showdown

Paytm’s decision to open its own app store after Google forced developers to use its billing system was a predictable move, as is the potential for fintechs to steal payment volume from the technology giants.

Google and One97 Communications’s Paytm, one of the largest payment companies in India, were already fighting over gaming payments when Google in late September decided it would require developers globally to use Google’s billing system, which takes a 30% cut. The dispute is similar to Apple’s dispute with Epic Games, which publishes Fortnite. In that case, Epic implemented a direct payment system against Apple’s App Store policy, so Apple delisted the game. Epic then sued Apple.

Paytm decided to open its own app store, teaming up with more than two dozen other firms in India. But Google has advantages that make it hard for any rival app store to gain traction, and make it really hard for independent developers to handle billing themselves.

But unlike Apple, Google doesn't prohibit competitive app stores on its own devices. “Google provides app development companies the option to enable multiple distribution methods and stores in Android devices,” said Krista Tedder, head of payments for Javelin Strategy & Research

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The Google Play marketplace is more than a distribution method but a payment hub for the developer, Tedder said, adding Google has designed a security infrastructure and processing method to reduce the instances of fraud and scams and to add consumer protections to the platform. “When the consumer submits a payment the transaction is processed through Google as a merchant through the standard card channel processes,” Tedder said.

Google and Paytm’s rivalry stems partly from Google Pay’s dominance of India’s UPI network, which supports digital payments. Paytm’s diversification includes support for fantasy cricket leagues through marketing and payment processing. Google Play banned Paytm for a time, contending the cricket payments were for gambling and in violation of Google’s standards. After trading barbs with Google in local media, Paytm began to build its own app store.

Both Apple and Google have the means to create headaches for developers that accept payments but don’t wish to do so on Apple or Google’s terms. Apple reportedly was prepared to remove the Apple login option for Epic accounts, which would have created customer service and payment headaches for consumers that didn't have a separate login method for Epic accounts.

At least on Google handsets, “there is nothing preventing Paytm or Epic from creating their own distribution app,” Tedder said, adding that would involve a QR code, bar code or one time code for download, creating a poor user experience.

“If the app developer chooses to use a different marketplace, they will need to have their own payment processing capabilities, gateway, or third party processor to complete all necessary tasks associated with payments,” Tedder said. Google and Paytm did not return requests for comment.

There is room in incentive marketing for third parties and developers to compete with Google, Apple and other large firms such as Facebook, contends Derrick Fung, CEO of Drop, a Toronto-based marketing company. Drop offers point incentives for shopping through an app in the company’s network, with redemption for participating brands.

Drop is approaching marketing data more than billing, contending there’s an opportunity in making data more personalized and actionable to the user. Fung cites recent departures of high-profile brands such as Unilever and Verizon from Facebook advertising as evidence that there’s space to compete with large data-producing technology companies on marketing grounds more than technical or processing grounds.

And the large companies are feuding over pending changes from Apple that will limit other companies' ability to target and track the performance of ads.

Drop just entered a partnership with Button, a New York-based technology firm that uses an API to enable targeted marketing that matches firms such as Uber with specific messaging for consumers based on past transactions.

“Big tech is often viewed as too big to fail. But the marketing opportunity is not just about politics but also about privacy. If there is a clear value proposition to the consumers to share data, they’ll be more willing to do it,” Fung said.