- Tinder started a default payment method that circumvents the Google Play app store and makes users enter their credit card information directly into its dating app. The feature remembers the payment details and removes the ability to switch back to Google Play for future transactions, Macquarie analyst Ben Schachter said in a report cited by Bloomberg.
- Google Play and Apple's App Store typically take a 30% cut on the sale of apps and in-app products, which drops to 15% after 12 months for ongoing subscriptions. The only way to avoid those fees is by pointing users to a separate website to handle payments — as Netflix, Spotify and the Financial Times have done — but Tinder is accepting payments in its app.
- It's unclear whether Tinder parent Match is looking to bypass the App Store as well. The company is expected to discuss with analysts how the changes will affect revenue during its next earnings call on Aug. 6, per Bloomberg.
Tinder's effort to bypass the Google Play store by processing payments inside its app is a bold move that may have significant repercussions if more app developers follow suit. It's unclear how Google will respond, and a growing revolt against its fee structure would negatively affect Google Play revenue on a broader level.
Google and Apple opened their app stores in 2008 to spur third-party development of apps that expanded the functionality and versatility of Android and iOS devices. Since then, their app stores have grown into billion-dollar marketplaces that host millions of apps. Their revenue grew 20% to $22.6 billion in Q2 from a year earlier, as downloads reached 30.3 billion, researcher App Annie found.
Google and Apple's dominance of the app economy has invited criticism from developers. Netflix last year stopped paying the so-called "Apple tax" for subscriptions to its video-streaming platform, while Epic Games is working on developing its own app store to similarly avoid paying fees on its popular games like "Fortnite."
Apple's prioritization of its own services is at the heart of an antitrust complaint by Spotify, the streaming music company that in March accused Apple of not providing a level playing field for competitors. Apple maintains a closed environment for its products as the gatekeeper of the App Store, where it can give special preference to its proprietary services while taking a cut of the revenue from competitors. Apple also can add new features to its iOS mobile operating system that eliminate the need for third-party apps like screen-time trackers, typically damaging those developers.
Because games are the biggest generators of consumer spending in the app store, Google and Apple could lose a significant source of revenue if game developers follow the lead of Netflix, Epic Games and Tinder to avoid app store fees. Google and Apple may have anticipated this possibility with the pending launch of their own streaming game platforms. Google's Stadia and Apple Arcade will let gamers play on smartphones, tablets, TVs and computers. Privacy-focused Apple will charge a fixed monthly fee for games that won't have advertising or in-app purchases. Google has been less clear about its monetization plans and whether they will include in-game advertising. Stadia product director Andrey Doronichev last week compared the service to Microsoft's Xbox Gold or Playstation Plus that charge a combination of subscription and download fees for games. Stadia may be a way for Google to support YouTube in drawing viewers away from Amazon's Twitch, the No. 1 platform for streaming live video of game-related content.