How Spotify's New User Choice Billing System Works

screenrant.com:

Spotify will be the first company to implement Google's new User Choice Billing initiative that will allow developers to offer an alternative payment option for their apps. Previously, Google and Apple claimed a 3o percent cut for all transactions made in an app that's listed on their app stores. Facing intense criticism from the developer community as well as regulatory bodies, Apple and Google reduced their cut for paid apps and in-app subscriptions to 15 percent for developers that meet certain revenue criteria.

However, the fee still needs to be paid, and any tricks to avoid paying the store tax will result in punitive action. Epic tried to test the waters by offering an external payment system to players purchasing in-game items in Fortnite. Despite being the biggest cash cow for mobile gaming, Fortnite was kicked off the App Store. An ugly court battle followed, leading to some startling revelations regarding Apple and Google’s business policies. Both the companies resisted relinquishing their app store tax, leading to a string of fines and legislations. In markets like South Korea, for instance, Google and Apple have been forced to offer alternative billing systems.

Related: Apple Says iOS Users Are Not Limited To The App Store, But Is That True?

Google is now being proactive, and in a move that can set an industry-wide precedent, the search giant is offering alternative payment systems for apps listed on the Play Store. The company fittingly calls it User Choice Billing. Essentially, Google will allow developers to offer a third-party billing system in their apps alongside Google Play’s own payments process. It will be up to users to choose the one they want to use. The experiment begins with Spotify in 2022.

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