Google to Let Spotify Offer its Own Billing on Android

In a surprising move, Google and Spotify announced on Wednesday that a future version of Spotify’s app would allow users to sign up inside the app to pay Spotify directly for a subscription.

The move is a major milestone for a major mobile app store to allow third-party billing systems inside apps. It also adds pressure to Apple to do similar as the iPhone maker is firmly against third-party billing in its App store. Apple has fought against a lawsuit from Epic Games, which is currently being appealed, over whether the developer can offer alternative billing in the U.S.

Spotify’s alternative billing system will be offered in addition to Google Play payments, the companies said.

Shares of Spotify soared roughly 4.5% in after-hours trading on the news.

Developers usually can’t solicit credit card numbers directly from their customers to bill them for digital goods or services on both Google Play and Apple’s App Store. They have to bill users through Google’s system, which takes at least 15%, and as much as 30%, of total sales.

Google said its allowance for Spotify to do its own billing on Android is a “pilot” move and doesn’t offer a timeline for wide implementation or specify which countries will first get the feature. The announcement suggested that only a “small number” of app makers will be allowed to offer their own billing, to start.

“This pilot will allow a small number of participating developers to offer an additional billing option next to Google Play’s billing system and is designed to help us explore ways to offer this choice to users, while maintaining our ability to invest in the ecosystem,” Google wrote in a blog post.

Spotify will still pay a fee to Google for payments it processes on its own, Google confirmed.

Google additionally said it would “build on” a policy that it introduced in South Korea where it continues to take an 11% fee on subscription purchases made through alternative billing, which became required by a recent law passed in the country.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.