Boku expands Spotify partnership

Thomson Reuters

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Carrier billing platform Boku announced plans to allow Spotify users in Germany and Italy to pay for the music streaming service using their mobile number, according to Finextra.

The service will be provided in partnership with every major mobile network operator (MNO) in Germany and a leading carrier in Italy. Carrier billing allows users to pay for apps and services via their mobile phone bill, rather than through a credit card or other payment method.

The partnership gives Spotify, which counts 75 million active users and 30 million paid subscribers, an addressable audience of 90 million potential carrier billing users through its new MNO partnerships.

Carrier billing partnerships have been successful for Spotify in the past and could gain traction in these new markets because of their ability to reduce friction.

• Boku initially partnered to offer carrier billing to Spotify users in the UK. Since then, the default payment method for new UK Spotify users has changed from credit card to carrier billing, according to Boku CEO John Prideaux. The partnership has also helped Spotify to grow revenue and acquire new subscribers. 
• Carrier billing is beginning to catch on in developed markets because of the convenience it offers. By allowing users to charge digital content purchases directly to their mobile bill, customers can skip the friction of manually entering payment information when joining Spotify, which could be particularly key in attracting users who largely use the platform on mobile. That could increase Spotify’s presence and paid conversion rate in Germany and Italy while potentially decreasing user attrition from changing card information.

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