Amid growing global regulations regarding the App Store and their commissioning structure, Google today announced the launch of a pilot program designed to explore what it calls “user billing options.” The program allows a small number of participating developers to provide an additional third-party billing option in their apps in addition to Google Play’s own billing system, starting with Spotify. While Google is already offering a similar system in South Korea, it will be testing the system in global markets for the first time after new legislation requiring it comes in.
As the first pilot partner, Spotify will offer both its own billing system and Google Play when the pilot goes live. Google did not say which other developers it selected for future testing, but noted that Spotify was a “natural first partner,” making it one of the world’s largest subscription developers with a global footprint. “integration”. World wide selection of device form factors. .
Spotify, of course, has been one of the big developers pushing for regulatory changes to existing billing systems and App Store structures after testifying before Congress on the issue, joining lobbying groups, and passing legislation. App stores, including the Open Market Act, which would require companies like Apple and Google to allow alternatives to existing app stores.
This struggle is not only about building more direct relationships with customers, but mostly about money. Current app stores typically charge a commission of 15% to 30% for apps that offer subscription and in-app purchases through their platform. Even in the case of South Korea, where Google was supposed to allow alternative billing systems, it cut the fees for developers directing users to their own billing systems by just 4%.
Spotify was asked for comment and declined to say how much it would pay Google for this pilot test, noting that the agreement is confidential. But a spokesman for the company suggested that the commercial terms were in line with Spotify’s “fairness standards”.
Google also declined to provide details about the fee structure. However, it was noted that user-selected billing, as in the case of South Korea, would still incur service charges regardless of the billing system chosen by the user.
The new system will not be available immediately after this announcement. Instead, it will take time for Google’s product and tech teams to embrace the new experience in the coming months. Live, users will see two billing options side by side in the Spotify app. If they choose the Spotify payment method, they continue to pay using Spotify’s proprietary billing system and user interface. If they choose Google Play billing, they will switch to Google Play billing instead.
Spotify is also primarily responsible for communicating with customers about their Spotify subscriptions. However, users who choose to pay via Google Play Billing can view their Spotify subscription in the Google Play Store subscription center as usual.
Spotify says it plans to pilot the first version of the system later this year. It will be offered in all markets where Spotify’s premium subscription is available today, gaming-updates said.
Google said the pilot is still in its infancy and that the company will learn many details about how the system works and what it looks like as it builds and builds on the Spotify experience.
“Spotify is on a year-long journey to give app developers the freedom to innovate and compete on a level playing field,” said Alex Norstrom, Spotify’s chief business officer for Freemium. “We are excited to partner with Google to explore this approach to payment options and opportunities for developers, users, and the entire Internet ecosystem. We hope that the work we are doing will pave the way for the benefit of the rest of the industry.