Google will test third-party billing in its Android App Store

Google makes it easy to pay for third-party apps on the Play Store.

Xiomara Blanco/CNET

Google announced on Wednesday that it would allow some developers to offer third-party payment options in apps running on its Android operating system, a move the search giant has resisted for years.

In a developer blog post, Google said it has rolled out a pilot program in South Korea that allows Android users to select non-Google payment systems. For security reasons, Google said it starts with Spotify and other trusted partners.

Spotify will introduce the billing system used by Google Play, the Android app store, alongside its own billing system.

“This is an important milestone and the first on any major app store, be it mobile, desktop or game consoles,” said Sameer Samat, Vice President product management, in the blog post. The ability to use third-party payment will be rolled out more widely in the future.

The move comes after years of resistance to third-party payment on Google Play and represents a major change in the way platform owners run their software marketplaces. Google, along with Apple, has vetted payment systems to ensure a discount, usually between 15% and 30%, depending on a few factors. The common practice of forcing all mobile transactions through Google or Apple’s payment systems reduces developer revenue. App stores like Google Play have been the subject of alleged monopolistic practices by lawmakers and regulators both in the United States and abroad.

In a major case, Google fought Epic Games, the creator of the hit battle royale game Fortnite, over payments outside of the Play Store. As soon as Epic Games started allowing players to purchase in-game purchases outside of the Play Store, Google pulled the popular title from its marketplace. As of press time, Fortnite is still not available on the Play Store, but can be downloaded and installed externally, similar to how a program is installed on a computer.

In October last year, Google filed a counterclaim claiming that Epic Games owed Google compensation for allowing users to download Fortnite through the Play Store, but use Epic’s payment system at the square. Google and Epic Games have agreed to a trial in early 2023.

Google’s payment policy change follows last year’s verdict in a lawsuit between Epic and Apple. The decision required Apple to allow app developers to notify consumers that they could exit the App Store to make payments for items or subscriptions purchased in apps. However, the developers can’t provide button connecting customers to another payment system.

Google’s program with Spotify will give some Android users more control over how they pay for the music streaming service. While the exact terms of the deal aren’t known, it could allow Spotify to promote certain deals or pass savings on to customers now that Google is offering alternative payment methods.

Spotify has frequently criticized Apple for abusing the power of its App Store, including billing system restrictions. Spotify said Apple retaliated when it tried to circumvent Apple’s payment system by rejecting updates to its mobile apps.

Apple has dismissed accusations that its App Store is anti-competitive, though the EU found that the company‘s in-app payment practices violate competition law. Apple did not immediately respond to a request for comment for this story.

Google allows some alternative payment platforms to be used with Android. The Samsung Galaxy Store and the Amazon Appstore are two prominent examples in the United States. The Huawei App Market Store and Tencent My App Store are examples in China.

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