Following the decision of app stores from Google and Apple to impose taxes on in-app purchases in apps, many popular brands have made moves to bypass the fees and Tinder; the popular dating application is one of the newest to build a resistance.
The world-famous date-matching app, Tinder, joins the likes of Spotify and Netflix in bypassing the fees in Google Play Store after the company is said to have been developing a new default payment process that skips Google Play payments and allows users to key in their payment information including their credit card numbers directly to the Tinder App.
This move from Tinder is an example of the backlash against app marketplaces like Play Store and App Store and their propensity to profit out of developers.
New research by Macquarie analyst Ben Schachter found out that the new payment system of Tinder would not allow users to swap back to Google Play Payment once they keyed in their financial information in the app. He said that the app not only remembers the data but also removes the choice from users.
“This is a huge difference,” Schachter said in an interview. “It’s an incredibly high-margin business for Google bringing in billions of dollars,” he said.
Schachter suggests that the for users to pay for their in-app purchases of subscriptions to services like Tinder Gold and Tinder Plus, Match Group, the company behind popular dating apps like Tinder, is instead encouraging users to pay through their system.
This move of Match Group for Tinder is similar to what famous video game developer Epic Games, which last year released the Android version of battle royale hit Fortnite, did who also had a payment system that bypasses Google Billing. Many apps like Spotify and Netflix have also had been testing their in-app payment systems to avoid the 30 percent cut when payment is processed via Google Play Store.
“At Match Group, we constantly test new updates and features to offer convenience, control, and choice to our users,” says Match Group spokesperson Justine Sacco in a statement given to Bloomberg. “We will always try to provide options that benefit their experience, and offering payment options is one example of this.”
The 70-30 model was first introduced by Apple back in 2008 and borrowed just a few months later by Google for its Play Store. While other apps treated the 30% cut for the app stores as cost of doing business, high-profile apps like Netflix and Spotify have since expressed their distaste to the system.
Amidst the backlash from app developers, Apple has tried to lower the cut percentage from 30% to 15% on purchases made by users who have installed the app for more than 12 months. Google implemented the same policy a few weeks after Apple’s decision, but it seems that developers are starting to get tired of the issue and take things into their own hands instead.
Last August, Netflix began reportedly testing a method similar in design to Tinder’s that lets users sign up directly to its service through a mobile webpage that would bypass the iOS App Store. In December of last year, Netflix stopped allowing in-app purchases of any kind for both new and existing users on iOS.
It is still unclear whether or not Google will impose sanctions on Google for trying to skirt its Google Play services. In the past, Apple was reportedly punishing apps like Spotify by not sending updates in the iOS store for the same reason.
However, Google did not impose any actions against Fortnite, but it is relatively because it is not directly distributed in Google Play Store. Unlike Fortnite, Tinder is hosted and is distributed in the Google Play Store, which makes it bound to the terms of Google.
Schachter noted that out of all the apps that have tried to bypass App Store by Apple, Tinder is the first one to create its own payment system that bypasses the 70-30 system in the app ecosystem. He added that this could spark a domino effect, and if proven successful, it is to be expected that other apps will follow through.
“Tinder is relatively small and it won’t have a massive impact, but the concern is if this grows and gets into gaming apps as it starts moving forward,” Schachter said. “We’re going to see a lot of other companies potentially trying to experiment with this.”