[mrweasel]

Processing credit/debit- cards isn't that expensive, 30% is a joke, even if you try to justify it with by saying that it helps pay for the store infrastructure.

Spotify pays no feed to Google when they handle the payment processing themself, via some credit card processor and honestly why the hell should they. So Google decide that in an attempt to get even the tiniest amount of payments to go through them, they'd drop the price to 4%... Why is that so important to them?

[Spivak]

They aren't charging the fee for payment processing, they're collecting the fee via payment processing. I don't understand why people keep making this mistake. Hell even Epic made it and lost horribly when they made it. The fee is a sales commission, you pay it because you want access to the customer base. They are allowed to deliver you literally nothing at all in additional services and still charge you a fee.

The other stuff they provide exists to sweeten the deal.

[alwa]

I believe the article cited 15% rather than 30% for subscriptions, or 11% if you process your own payments. So [.15, .11] —> [.04, .00], or an overall discount of 11% off subscription revenue they take through the platform.

It sounded to me that, in exchange for that favorable per-subscription rate, Spotify paid $50,000,000 into a “success fund,” whatever that means. $50mm / .11 = $454mm... sounds like they’re basically paying the equivalent of Play Store commission on half a billion’s worth of revenue, without any guarantee that they’ll actually be able to sell that much new growth through Play Store. That feels like sharing the risk in a way that isn’t too out of the domain of reason.

From [0], they added about $2bn in revenue year-on-year in 2022. Although we don’t know the term of this Play Store agreement (or what a “success fund” is), paying an amount equivalent to the normal commission on 1/5 of that total annual growth figure seems like a pretty nontrivial amount to commit.

[0] https://www.businessofapps.com/data/spotify-statistics/

[conductr]

30% is because most transactions, early on, were around $1. And processing fees are usually $0.25 + ~3% = so 28% of the average transaction.

When you start applying that 30% to $15 spotify subs, $50 uber rides, $60 video game, then a bunch of in-app purchases ranging in value; the math falls apart and if you have scale to do it, the negotiated rate makes more sense for those businesses given the average transaction amount.