. With the additional markets, user choice billing will be tested in most of the world’s largest smartphone markets and most valuable music markets.
With user choice billing, prospective Spotify subscribers are presented with two payment options side-by-side in an Android app: Spotify and Google Play. Choosing Spotify will take the user to a form to fill out credit card information to sign up for a subscription. Importantly, it all happens within the Spotify app, not Spotify’s external website. Choosing to pay with Google Play prompts the user to enter a password to pay with the credit card on file with Google.
There’s one other option, of course: To save on fees, a music service may disallow in-app subscriptions and encourage a customer to take a few extra steps and subscribe at its website. That process risks losing potential subscribers along the way, but nevertheless, Spotify has gone this route and not allowed in-app purchasing on its Apple app since 2016.for subscribers who used Apple’s in-app purchasing premium subscription service from $9.99 to $12.99 to offset the fees.
“It certainly puts independent music services at a disadvantage where we’re paying 30% of the economics out to the platforms that distribute our apps, who also happen to be competing with us, and for the same users, and the same economics,” Pandora’s then-CFO