Time for Google to Step up Payments

Apple app store subscription policy is a clear case of overreaching.  I have written before about how I don’t think the 30% take rate for Apple is justified or sustainable.  Extending that pricing to an ongoing relationship is particularly problematic.  The argument — made by no less than Jobs himself — that Apple should be entitled to a 30% cut for a “new subscriber” seems to suggest that these subscribers simply would not exist without Apple.  While true that Apple has built a hugely innovative mobile delivery platform it is no longer the only such platform and people frequently learn about apps they want to download outside of the platform.  I am not suggesting that Apple shouldn’t take a cut.  I am simply arguing that it should be considerably less.  

This turns out to be a huge moment of opportunity for Google, if they were able to deliver on a payment solution that is easy to use and attractively priced.  Payments would be important not just in competing with Apple but also with Facebook. Facebook is taking a similarly large cut of payments made with credits and is also aggressively pushing platform developers to only use Facebook credits.  Google faces a huge uphill battle here because they don’t have a lot of consumer credit cards on file, whereas Apple has 100 million or more.  They’ll need to come up with a fairly aggressive play here.  Instead of spending $6 billion on Groupon, Google could — for instance — give people $50 credit when they link a credit card, get to 100 million credit cards and still have $1 billion left over!

UPDATE: That was quick.  Google has announced One Pass — now let’s see how aggressive they are about pushing it into the market.