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South Korea's Kakao removes external payment method amid Google Play standoff

Google gets its way after meeting with internet company and Korea Communications Commission

Kakao has backed down from what appeared to be a standoff with Google regarding external payment methods following the suspension of updates to its popular messaging app KakaoTalk this month.

As of last month, Google instituted a new payments policy requiring developers selling digital goods and services to use its first-party billing system. The company said apps using an in-app billing system as an alternative to Google Play's would need to remove it.

"Starting June 1, 2022, any app that is still not compliant will be removed from Google Play," said Google.

Kakao appeared to challenge the policy by continuing to use an external payment link in the app, but as of June 30 KakaoTalk software updates were suspended. According to the South Korean company, its application to have its latest version of the app on Google Play was denied for not complying with policy.

Kakao released an APK file to its own internet service portal, Daum Portal, on July 1 as a workaround.

On July 7, Kakao, Google, and the Korea Communications Commission all sat down for a chat where Kakao made clear their intention to stop using the external links, according to Business Korea.

According to the Yonhap news agency, Kakao said it was only intending to bring more convenience to users of the freeware. (It's also more convenient for the app developers as they skip out on paying fees to Google.)

While Google allows third-party payment systems, it does not allow external ones. But that's not necessarily out of Google's goodwill – South Korean lawmakers banned app store operators from forcing developers into their own in-app payment method.

Although Google agreed to comply, it actually continued to funnel all transactions through the Play Store, charging a fee even when users chose third-party payment providers. The Communications Commission decided in April that the behavior was not in accordance with law.

Google is not the only app store operator affected by the law; Apple has also been under scrutiny for dragging its heels in compliance. Earlier this month, Apple opened up an option for alternative in-app payment processes for apps distributed in South Korea, although the company didn't make it easy to use.

South Korea remains the first country to legislate compulsory inclusion of third-party payment options in app stores. ®

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