The average person thinks of payments rarely, if it all. And when they do, they are most likely to consider them as infrastructure. Something important, but invisible.
But that narrative is shifting to reveal a truth that industry insiders have long known: payments are increasingly a competitive differentiator.
“We do a lot of painted door tests, which are helpful. If we put a payment method up and we’re seeing a lot of clicks on it, then that’s telling us something,” Sandra Alzetta, VP and Global Head of Commerce and Customer Service at Spotify, said during a discussion for the PYMNTS Monday Conversation series hosted by PYMNTS CEO Karen Webster.
“Our philosophy is very much to start with user choice,” Alzetta added. “We want to make sure that our users are able to pay in the way that feels natural to them and that best meets their needs.”
That may sound obvious, but in practice it’s a monumental undertaking to get in front of trends and not wait for critical mass to be present before integrating new payments into the mix. Unlike physical retail, where credit cards dominate, digital ecosystems vary widely by geography. What works in one country may flop in another.
“Payments is having a moment,” PYMNTS Webster stressed. “We’re now in a really interesting part of payments evolution.”
This evolution is no longer just about moving money from Point A to Point B, but about building trust, enabling access, and providing choice in a way that defines user experience as much as the core product itself.
Casting a Wide Net Across Bundles, Add-Ons and the Expanding Ecosystem
Spotify’s own strategy is to begin with global networks like Visa and Mastercard, then layer on locally preferred methods: wallets, bank transfers, prepaid cards and more. This is where experimentation comes in.
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“If we put in the payment methods that people want to use, then they will use them. And we’ll see much better performance,” Alzetta explained. “If we put a payment method up and we’re seeing a lot of clicks on it, then that’s telling us something.”
The data proves her right. In India, after Spotify enabled the Unified Payments Interface (UPI), adoption skyrocketed. Similarly, Brazil’s instant payment system, Pix, has already become a major driver of subscriptions.
Of course, not every experiment sticks. In Southeast Asia, Spotify jumped early into wallets, turning on as many as it could. The outcome? Some thrived; others fizzled.
And as Spotify expands beyond music into audiobooks, podcasts and merchandise, the role of payments becomes more complex. Alzetta noted that each new vertical introduces new expectations. Yet for now, subscriptions remain the dominant engine. Add-ons, like extra audiobook hours, may grow in importance, but they have not fundamentally reshaped the economics of the platform.
For now, these new services don’t fundamentally change the payments equation. Instead, they reinforce the need for flexibility: different users, in different markets, with different expectations.
Identity, Fraud and the Trust Equation
Payments innovation cannot be divorced from questions of identity and trust. In a digital-first world, where consumers expect to “pay and play” instantly, the connection between who someone is and how they transact is tighter than ever.
“Identity is having its moment at last,” Alzetta said. “And for us, this is really part of the whole payments experience. How do we manage our fraud and your identity so interlinked with that.”
Spotify’s north star, she added, is minimizing false positives. Blocking fraudsters is critical, but accidentally shutting out legitimate users is worse.
To minimize these risks, the platform layers multiple systems powered by artificial intelligence (AI). These systems look beyond simple markers like card details to consider user tenure, streaming habits, past payment behavior, and device data. The goal is to build a holistic picture that can distinguish friend from foe without alienating the very users the platform seeks to serve.
After all, no conversation about the future of payments is complete without artificial intelligence. For Spotify, AI is both a safeguard and a looming risk.
On the defensive side, AI enables sophisticated fraud detection. By analyzing patterns across billions of transactions and user interactions, AI models can detect anomalies that human teams would miss. Yet those same tools are available to bad actors who use AI to orchestrate more convincing attacks and exploits.
But the future isn’t just about bad actors. Generative AI introduces “agents” that could transact on users’ behalf. The question becomes: which agents are trusted, and under what conditions?
“Good news agents can help our users, you know, to make life easier. But then the questions are very much about who is this agent? Has the user given them permission? Where will liability sit if this hasn’t actually worked?” Alzetta asked.
It’s a regulatory, ethical and user trust puzzle still being pieced together.
Webster ended the conversation with a provocative thought experiment: If Spotify were to design the “Spotify of payments,” what would it look like?
Alzetta didn’t hesitate: “We would really want to be famous for user choice, really understanding a marketplace, understanding the needs of our users and making sure that we’re providing it for them.”
Source: https://www.pymnts.com/
