Spotify and Google announced a new multi-year agreement that both lowers commissions and allows Spotify to utilize their own payments platform for in-app purchases. Spotify has been reportedly pushing to use their own payments app for years, and it makes sense; using a common platform for all payments gives Spotify additional scale in payments and streamlines the administrative functions of managing payments settlement across their business. The exact commission split is not being announced publicly but it reported to give Spotify significant relief from their existing 15% deal with Google. While Google is calling this a “pilot program” that tests the functionality of app developers bringing in their own payment services, industry observers believe that barring any complications, Google will unlock this feature across their developer base.
Despite reaching an agreement with Google that paves the way for an end to years of contentious discussions, Spotify is still pressing Apple for similar terms. The Coalition for App Fairness (CAF), of which Spotify is a major member, continues its lobbying efforts against Apple.
“Every member of CAF is committed to fighting for systemic change for all developers,” said Rick VanMeter, the executive director of CAF. “We are united in ending the monopolistic practices that stand in the way of an open, fair and competitive digital marketplace. Our mission is more important than ever as momentum grows for enforceable policies that level the playing field, including the Open App Markets Act and the Digital Markets Act.”
Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group