In-app purchases (IAP) are products offered for purchase within the app. Users typically make in-app purchases to access special content or features, such as virtual currency, power-ups, restricted levels, enhancements, and more.
The purchase process is performed directly in the app, in most cases seamlessly for the user. Mobile platform providers facilitate the purchase and take a share of the payment transferred (usually about 30%) and the rest goes to the application owner.
Currently, Apple offers 4 types of in-app purchases: non-replenishable, replenishable, one-time, and auto-renewing subscription. IAP can be used in premium as well as in free apps, also known as freemium.
Non-replenishable - This kind of purchase is applied to one-time payments, such as access to some features of an app. The user pays once and the access to services is transferred to all connected devices, authorized within the same iTunes account.
Replenishable - These purchases can be found in games and require payment multiple times, for example, on different devices.
One-time subscription - The subscription has a limited period. It can be seasonal, or just services available in certain time periods. When the term ends, you must renew this subscription manually.
Auto-renewing subscription - The subscription will be repeated automatically in a certain time period, if there is enough money on the user’s account.
In 2012 Apple has introduced a mandatory condition for developers: in the description of an app that has IAP, there must necessarily be a note indicating this. If the program contains purchases, near the "Price", "Buy" or "Get" button you’ll see “Offers In-App Purchases” or “In-App Purchases.” On the iPhone, iPad or iPod touch, you’ll see it below the name of the program.
To make a purchase in the app, you must use the Touch ID or enter the Apple ID password.
You may use restrictions to enable or disable certain types of purchases on the iPhone, iPad or iPod touch or set the Parental Control function in iTunes on a Mac or PC.
Read more about mobile app monetization.