Explained: Why was Paytm removed from Google Play Store and what it means for other gaming platforms

Earlier on Friday, Google took down one of the most popular fintech applications in India, Paytm, from its Play Store.

The app was put back by late in the evening, after Paytm ‘temporarily’ removed cashback component to meet the Play Store requirements.

Google confirmed the development and shared a blog post in response to numerous press queries that might have flooded their inbox.

The American search engine giant said that they do not allow online casinos or support unregulated gambling apps that facilitate sports betting.

“This includes, if an app leads consumers to an external website that allows them to participate in paid tournaments to win real money or cash prizes, it is a violation of our policies,” the blog post read.

Industry sources pointed out that Google without naming it directly might be indicating towards Paytm First Games, the challenger to fantasy gaming platforms like Dream11, HalaPlay, Mobile Premier League and so many others. However, Paytm founder Vijay Shekhar Sharma spoke with CNBCTV18 and said that the problem was around cricket stickers given out by Paytm as a form of cashback.

While Google said that they had shared these concerns with Paytm developers multiple times, Sharma during the interview pointed out that there was just one letter issued in the afternoon of September 18 and the app taken down from the Store, the same day. There were three letters issued previously by Google highlighting concerns around Paytm First Games, which have been adhered to by the Alibaba and Softbank-backed company, Sharma asserted.

Taking the charge directly to the tech giant Sharma said that Google was behaving as the judge, jury and executioner here.

Interestingly this entire issue has opened a whole new set of questions for the Indian consumers, the banking fraternity and the legion of app developers in the country. Here are a few issues that stand out from the kerfuffle.

Google’s control over digital banking services in India

Paytm is after all a digital banking service provider. If Google removed the app outright from the Play Store, it goes on to show the kind of power an American company has over Indian digital services. Further with India being primarily an Android market, it reflects on the amount of dependence Indian banking applications might be having on a foreign entity. The question that comes up here is the role of the banking regulator in all this.“While Paytm might be or might not be at fault here, the question that comes up what is allowed to be put into a banking app and the RBI needs to look into it,” said a fintech founder on the condition of anonymity.

The power of Google over the Indian app ecosystem

 This is not the first instance of an app being taken down from the Play Store by Google. A few weeks back another fintech app, Mobikwik, was taken down from the Play Store as well. Bipin Preet Singh, the co-founder of Mobikwik had highlighted that Google took down Mobikwik since it was promoting the Aarogya Setu app, meant for COVID-19 contract tracing among Indians. Interestingly, it was done as a mandate from the central bank in order to push up adoption of the app among Indians. Mobikwik was eventually reinstated into the Play Store.Vijay Shekhar Sharma also stressed on the fact how the Indian app ecosystem is dependent and is almost at the mercy of Google and said that many entrepreneurs had faced similar issues in the past.

Does India need its own app ecosystem to counter the influence of an American tech giant on the digital economy of the country? Maybe Atmanirbhar Bharat first needs an Indian platform for promoting its app economy.

Paytm allays fears, says linked accounts remain safe

“We continue to work with Google to restore the app. We assure all our users that their balances and linked accounts are 100 percent safe. Our services are fully functional on all existing apps and you can continue enjoying Paytm like before,” said Paytm in a blog post shared on its website today.The biggest takeaway from here is that Paytm customers need not worry about their wallet balance or their account money getting lost in the process. Apple’s App Store has not taken a similar action against Paytm, hence iPhone users can update or install the app as usual. Even Paytm’s other subsidiaries like Paytm Money, Paytm for Business or Paytm Mall are still functional and available for download on the Play Store. Moreover, the app remains functional and all banking activities can be undertaken by Paytm users. Only new downloads and updates were affected.

Google's stance against online gaming may hit more apps

The Indian legal fraternity has shared its two pence on the entire issue. Lawyers pointed out that Google’s decisive action against a giant like Paytm goes on to show that Google might be very serious against promotion of online gaming and betting on its platform.“Many other apps are also promoting betting and gambling websites through ads and pop-ups, if Google applies the same standard, I would expect more apps will get taken off the Play Store,” said Akash Karmakar, partner, Law Offices of Panag and Babu.

Industry insiders pointed out that fantasy gaming is not outright illegal in the country. In fact Dream11 one of the pioneers of fantasy gaming here is the title sponsor for the Indian Premier League.

“In India, legislation puts a blanket ban on sports’ betting, however fantasy sports is not illegal in most Indian states….Google’s policies will have an over-arching implication on Apps in its Play Store,” said Sonam Chandwani, managing partner, KS Legal and Associates.

The entire debate has brought the focus back on the legality of fantasy gaming in the country. Popular apps like Dream11, Mobile Premier League and others are not available on the Google Play Store because of its stringent app policy. These apps need to be downloaded from their respective websites.

Federation of Indian Fantasy Sports had flagged the issue

In fact, Hindustan Times reported that the Federation of Indian Fantasy Sports had flagged the issue with Google in order to ensure a level playing field among every fantasy gaming player. “An indirect implication would be the compliance of its policies by sports fantasy apps like Dream 11 and MPL that are not directly available on the Google Play Store platform but feature in advertisements and inducing similar effect on its user, eventually leading to a violation of its gambling policies,” said Chandwani.

The conflict of interest angle: Perhaps an unintended but related debate is also around Google competing with Paytm in its core business through its UPI offering Google Pay. While Google strictly maintains separation of all its separate business verticals, but public conversations have revolved around the conflict of interest angle around Google running a platform as well as related businesses too. For instance Google Pay very recently was found out to be the most downloaded fintech app globally. An Entrackr report pointed out how Google Pay was at the top followed by PhonePe at the fourth position and Paytm at the sixth position. If Google while competing with Paytm can take down the app altogether, it goes on to show the dominant position that Google enjoys in the app ecosystem of the country.