Spotify stops accepting payments that were set up through Apple's App Store - Engadget

Spotify is notifying users who’ve subscribed to its Premium service through Apple’s in-app purchase system that it will no longer be supporting it as a payment method. As a refresher, Spotify hasn’t allowed users to subscribe through Apple’s in-app purchase since 2016. However, those who had already subscribed via that method years ago could keep paying Spotify that way until now.

As reported by Variety, the company is emailing affected subscribers about the upcoming change. The email reads, “We’re contacting you because when you joined Spotify Premium you used Apple’s billing service to subscribe. Unfortunately, we no longer accept that billing method as a form of payment.” Spotify continues to say that those users will automatically be switched to the company’s Free, ad-supported tier at the end of the current billing cycle. “If you wish to keep your Premium subscription, you will need to re-subscribe after your last billing period has ended and your account has been moved on to the Free account.”

But that’s probably for the best. Due to Apple taking 30 percent of in-app purchases, Spotify users who were subscribed through in-app purchases were being charged an extra $3 per month compared to subscribing through Spotify directly. That’s despite the fact that Apple now reduces its commission rate to 15 percent on subscriptions after the first year. Apple said in a regulatory filing from 2019 that it collected that 15 percent fee on roughly 680,000 Spotify customers. Users transitioning from Apple’s payments can subscribe to Premium via a credit card or PayPal.

Both Apple and Google charge a “tax” on their respective app stores, regardless if a user is purchasing apps or subscribing through in-app purchase. Early last year, Google announced that it would be piloting a program that would allow third-party billing systems on Android, beginning with Spotify called User Choice Billing (UCB). Google began rolling out UCB to Spotify users late last year. Though, it’s unclear how many users are subscribing via UCB compared to using Google’s standard in-app purchase system. While there have been rumors about Apple allowing third-party app stores on iOS, there aren’t any official plans for those or for accepting third-party billing.

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