Google to Allow Spotify to Offer Alternative In-App Payment Options

Google has announced it is running a pilot to allow a “small number of participating developers” to offer an additional payment option next to Google Play’s payment system.

Google and Spotify said on Wednesday that a future version of the Spotify app will allow users to sign up inside the app to pay Spotify directly for a subscription. Spotify’s alternative billing system will be offered in addition to Google Play payments, the companies said.

The move is the most significant concession so far from a major mobile app store to allow third-party billing systems inside apps, which has become a major focus for regulators around the world.

“This pilot will help us to increase our understanding of whether and how user choice billing works for users in different countries and for developers of different sizes and categories,” Google said in a blog post.

According to Spotify, the pilot between the two companies represents a “first-of-its-kind option in payment choice” and forms part of a “multi-year agreement”.

“Users who’ve downloaded Spotify from the Google Play Store will be presented with a choice to pay with either Spotify’s payment system or with Google Play Billing,” said Spotify in a statement. “For the first time, these two options will live side by side in the app. This will give everyone the freedom to subscribe and make purchases using the payment option of their choice directly in the Spotify app.”

Although it’s unclear how this will impact the fees Google takes from purchases made in the Spotify app using Google Play, Google said the pilot will help it to understand “whether and how user choice billing works for users in different countries and for developers.” Google also said in a statement to the media it aims to have “pilot developers live with user choice billing in 2022 in key markets.”

The announcement comes in the wake of massive pressure on Google and its rival Apple Inc. over the fees they collect on transactions in apps on their mobile platforms, Android and iOS. Indeed, Spotify itself has been one of the most notable companies to ramp up that pressure in recent months.