Warning… a £2.55 Android app can end up costing you £4.69

One of our readers got in touch with a little cautionary tale, letting us know that his purchase of a £2.55 Android Market app ended up costing nearly TWICE as much once VAT, currency conversion and bank card usage fees were applied to the advertised cost.

The example used here is Squeeze Commander, advertised in the Android Market listing as costing “approximately” £2.55. When you go to pay for it via Google Checkout the system adds VAT to that cost, taking it up to around £3.04…

android app vat fees 2 android app vat fees 1

…then the currency conversion from the buyer’s bank took the actual total charged up to £3.19, before, in our poor reader’s case, his bank (Halifax, Visa debit) then added a £1.50 fee to the transaction. End cost – £4.69.

android market credit card fees

So… you might want to check the terms & conditions of the card you use to buy apps with, as getting a nasty £1.50 transaction fee added to your Android Market purchases can seriously increase the cost of your apps.

16 ResponsesLeave one →

  1. MrChaz

     /  November 18, 2010

    It does show a tilda (~) infront of the price which means ‘roughly’. On the other hand it’s apparently way off a lot.

  2. I think this shows the problem with foreign apps in the Market at the present stagte. The price given by Google is presumably a live currency conversion, but doesn’t take into account VAT. The card company has a different ForEx conversion rate, and then it applies a handling fee of £1.50 on top! I wouldn’t be surprised if many people got caught out. Maybe it is time there was something like PayPal used or Google included their own scheme so that the price shown is the price paid because if not this will seriously damage the purchasing of paid apps from cross border developers.

    • Tamblin

       /  November 18, 2010

      Is is a little unprofessional and will leave a bad taste in the mouths of some users. How does Apple handle its microtransaction billing?

  3. Timbo

     /  November 18, 2010

    As for Paypal, I am sure they do the conversion then charge you in your local currency. Not 100% though. I’d be happy even if they gave you a slightly poorer rate on the conversion if it saved fee’s like this!

  4. bitman

     /  November 18, 2010

    this has nothing with the android market to do but the greedy UK banks…

    try to find a credit card like the santander zero so you will not have this £1.50 costs

    and install the OANDA Currency Converter on your android to keep an eye on foreign currency ;)

    • Timbo

       /  November 18, 2010

      Bitman, it is related to the Markey via Google checkout. I have just checked with Papal, and they can convert BEFORE charging, therefore avoiding costs like this:-

      When you use your credit card as the payment method, we will give you the choice as to who performs the currency conversion:
      If PayPal performs your currency conversion, we will disclose the conversion rate to you at the time of the transaction
      If you choose the credit card association currency conversion, your card issuer will determine the foreign exchange rate to apply to the transaction. You will not be informed of the foreign exchange rate or any additional foreign exchange fees applied until you are billed by your card issuer
      American Express payments are always charged in US Dollars

      About time Google and/or Google Checkout did something about this!

    • Andrew

       /  November 18, 2010

      But Santader do charge on their debit cards as Halifax have in this case.

  5. Tony

     /  November 18, 2010

    this sort of happend to me with a 79p app got an extra £1 charge

  6. Peter

     /  November 18, 2010

    Someone needs to tell Google the Europe isn’t America and get them to display prices including vat.

  7. Hi guys,

    That’s really stupid. :-(

    Of these £4.69, I receive £1.78, i.e. the user has to pay roughly 2.65 times the amount of money that the developer will get at the end. What a wonderful ratio. :-(

    Ok, Google cannot do much about the credit card fee, but IMHO they should show all prices “including VAT”.
    Here in Germany it’s not even allowed to show prices for end users without VAT…

    Furthermore, it may be better to charge the user in their local currency (£ in this case) to avoid conversion fees.

    AFAIK, on the Apple AppStore, the developer can set prices for the different regions individually (i.e. the dev can set distinct £, $ and € prices).

    Sorry for the inconvenience. :-/

    PS: I hope you like SqueezeCommander anyway. :-)

    Best regards,

  8. M.P.

     /  November 28, 2010

    TBH this isn’t Google’s fault, as they can hardly be expected to advertise prices including VAT when the rate varies from one EU country to another. The only way they could do it was by buildign a localised version of the store for each country. Just be adults and know your bank’s T&Cs for foreign currency transactions (and, ideally, switch to a bank that doesn’t charge you!).

  9. Peter

     /  November 28, 2010

    The vat rate is configured by the developers since Google is too lazy to handle it properly itself. There is no reason the post vat price is not displayed apart from the Markets general crapness.

  10. Denni

     /  July 2, 2011

    There is no reason why Google can’t perform currency conversions just as Paypal does (this avoids the 1.50 quid conversion charge and thus works out much cheaper for low-cost items, such as apps). Google ‘helpfully’ converts all prices into Stirling so I’m not buying any more apps unless I _know_ they are from a UK developer!

  1. Tweets that mention Warning… a £2.55 Android app can end up costing you £4.69 » Eurodroid -- Topsy.com
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