Google today announced that popular streaming music service Spotify will be able to bill Android users directly in the Google Play version of Spotify without needing to go through the Google Play billing system.
Spotify is Google’s first partner for “User Choice Billing,” a feature that allows Android users to make purchases using the payment option they prefer. User Choice Billing is essentially an alternative billing option for in-app purchases, and it comes with a reduced fee.
Spotify will be able to collect payments directly from users, and Google will charge Spotify four percent less than normal. Spotify and other developers who eventually adopt User Choice Billing will still need to give Google a cut of their app sales and purchases, but at the reduced rate. Google normally collects between 15 and 30 percent of in-app purchases, much like Apple.
In a blog post, Spotify said that Google has taken a “bold step to help level the playing field,” and that “fair and open platforms” bring “frictionless consumer experiences.”
Spotify has been publicly advocating for platform fairness and expanded payment options for years. We believe that fair and open platforms enable better, frictionless consumer experiences that also empower developers to imagine, innovate, and thrive.
Spotify is rolling out an initial test implementation of user choice billing to users in select countries starting this week. Google today also announced a partnership with Bumble, with Bumble adding support in the coming months.
User Choice Billing from Google is an option in 35 countries, including the United States, much of Europe, Australia, Japan, and more, and it is a pilot program that other developers are also able to join.
With User Choice Billing, Google has distinguished the Play Store from the App Store, as Apple does not let apps use alternative billing at this time. There are two exceptions, however, including South Korea and the Netherlands. Regulators in these countries have forced Apple to allow some apps to use third-party payment providers.
In the Netherlands, Apple collects a 27 percent commission instead of a 30 percent commission, and in South Korea, Apple collects a 26 percent commission. Both reduced commissions are similar to what Google has done for its User Choice Billing System. With Google adopting options for alternative billing and continued regulatory pressure, it is possible that Apple will also fold and expand the Dutch and South Korea processes to other countries and app types, but Apple is continuing to fight for in-app purchase to remain the only payment method in the App Store at the current time.