In-App Purchasing

In-app purchasing is considered to be the acquisition of goods and services through a mobile application on a smartphone or tablet device. Free providing developer’s applications becomes possible largely due to in-app purchasing. Users downloading the free version of the app are faced with ads for upgrading to the paid version to unlock some features, commercial of special items, or even other mobile applications, in order to increase sales. Despite the fact that the application itself is given away for free, advertising helps the developer to make a profit.

In-App Purchasing explained

In-app purchasing helps app developers to sell from inside the app itself without involving other marketing channels. For example, moving to a more difficult level in a game application is sometimes possible only for a fee, or a view of premium content may be available for a user only behind a pay-wall. 

Earnings and advertising revenue for developers are usually enough to cover the costs of creating and maintaining the application. Buying a full version of an application, including allowing the user to enjoy the app without ads, is the most prevalent type of in-app purchasing.

More about In-App Purchasing

Google Play and iTunes, the largest app stores, give users the opportunity to download apps with in-app purchasing, which they usually notify their customers about. App stores often take a percentage of the in-app sales. Some of them allow refunds after purchase if for any reason they are requested.

In-app purchasing is an integral part of the freemium model, designed to monetize any content or mobile apps. A separate website visit to complete a transaction is not required when consumers make in-app purchases. Attempting to make a sale by redirecting to an external website prevents from charging a commission on the purchase, thus violating the terms and conditions of most app stores. 

Limitations of In-App Purchasing

Unauthorized purchases through the mobile app can lead to security issues. Unprotected passwords and credit card information stored in a customer's mobile app are particularly at risk. Sending purchase receipts with email by applications helps prevent fraudulent purchases in time.

Currently, there are no specific recommendations related to in-app purchasing, however, one cannot but note the interest that exists in them from regulators. One of the reasons for this interest is the access of children to mobile devices. The optimization schemes in these applications result in kids who make in-app purchasing that their parents cannot cancel without immediately noticing.

Parents and regulatory authorities have concluded that making it easier to shop on these apps is aimed specifically at children. Typically, advertising targeted specifically at children for profit is not regulated by established codes and laws, however, at the same time, it is both frowned upon and subject to more ethical and moral standards.