Date First Published: 15th March 2024
Topic: Computer Systems
Subtopic: Computer Software
Article Type: Computer Terms & Definitions
Difficulty: MediumDifficulty Level: 4/10
Learn more about what an in-app purchase is in this article.
An in-app purchase (IAP) is a purchase made within an app to buy additional content or features, or sign up for subscriptions. An in-app purchase is most commonly made within mobile apps for iOS and Android, but they are used in apps of the Windows and macOS app stores.
In-app purchases are how most developers make money from apps. They enable the freemium model for apps and games: providing the basic app or game free of charge and charging for unlocking extra content or features. This can encourage users to try them without making a purchase.
Developers can sell a wide range of things within apps and games. For example, in games, users can spend real money on in-game currency. In apps, users can unlock advanced features, remove ads, and remove time limits. This allows an app to reach as many users as possible, whilst also allowing users to select the add-ons they want, making it possible for developers to provide their application for free and make money from additional purchases.
In-app purchases allow users to pay within the application itself rather than through marketing channels or a separate website. In-app purchases are enabled by the payment data already stored on the device and are charged to the user's linked account. That information is added to buy features from any app installed on the device. This makes in-app purchases quick and convenient, but they often add up faster than users realise and can result in higher-than-expected bills.
The developer hopes to make enough money from all these additional purchases to cover the costs of developing and maintaining the application. Also, application stores often take a percentage of the in-app sales.
In-app purchases have been accused of being misleading as "free" games sometimes require the purchase of add-ons to advance in the game. Sometimes, apps and games may be free to download and install, but users may not be able to access any features without making an in-app purchase.
Since in-app purchases are performed through a mobile device, unauthorised access to the device can result in unauthorised purchases. This is especially true if the password used in the application is weak. Also, many children have access to smartphones and can make in-app purchases without their parent's permission. However, most applications will email a receipt after a purchase has been made, which can allow an unauthorised purchase to be refunded within a certain period of time.
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