Glossary - In-app Purchase (IAP)

The term In-app purchase (IAP), which is sometimes also known as a microtransaction, refers to any purchase that is made in a mobile application. Though in-app purchase users can access features like restricted levels, power-ups, special characters, boosts, virtual in-game money, and more, the elements that can be bought may vary depending on the application at hand. 

Advances in app development have allowed developers to build the core functionalities of applications and charge users for bonus content. The process of purchasing through the app most of the time feels seamless for the user. The mobile platform’s app store usually facilitates the purchases and takes a share from the money spent on the mobile application. This share can range from 30 percent or more, depending on several circumstances. The rest of the money is then transferred to the app developer. 

History of In-app purchases

The concept of in-app purchase was first applied in the IOS App store alongside the release of the IOS 3.0 operating system in October of 2009. Other platforms like the BlackBerry App World and the Google Playstore all adopted their own versions of In-app purchases in September 2010 and March 2011, respectively. Google’s version was called in-app billing, which was available to Android users only. 

Current development

Mobile giants like Apple are currently offering four types of in-app purchases. These are replenishable, non-replenishable, auto-renewing subscriptions, and subscription-based purchases. IOS game development companies all have applied either one or more than one type of in-app purchases system. The in-app purchases system can be applied to both free and premium applications. These applications are sometimes also known as freemium apps. 

The Controversies

The adoption of the In-app purchase (IAP) system did not come without its controversies. Most of the time, the users were making unwanted purchases. To fix the issue at hand, Apple rolled out IOS 4.3, which required users to enter their passwords before making any purchases within the game. Some platforms even allow users to disable this function entirely. Most app stores encourage users to disable this function when using a shared mobile device, or giving it to underage teenagers or children to avoid unintentional purchases or misuses.