business
In-App Purchase
A monetization mechanism that lets users buy digital content, features, or subscriptions from within a downloaded app, processed through the App Store or Google Play billing systems.
In-app purchases (IAP) are transactions that happen inside your app after the user has already downloaded it. They are the primary revenue model for the majority of top-grossing apps on both the App Store and Google Play.
Types of In-App Purchases
Consumable - items that are used up and can be purchased again. Examples: game currency, extra lives, credits, or tokens.
Non-consumable - permanent unlocks purchased once. Examples: premium features, ad removal, content packs, or pro upgrades.
Auto-renewable subscriptions - recurring payments that automatically renew until cancelled. Examples: monthly premium access, annual plans, or tiered service levels.
Non-renewing subscriptions - time-limited access that does not auto-renew. Examples: seasonal passes or time-limited content access.
IAP and ASO
In-app purchase revenue directly affects your position on the “Top Grossing” charts in both stores. Apps with strong IAP revenue appear in these charts alongside apps with high download volume, providing an additional discovery channel.
The presence and pricing of in-app purchases also affects conversion rate. Users evaluate whether the free version offers enough value and whether the paid offerings are reasonably priced. Transparent IAP pricing in your store listing description can improve trust and reduce negative reviews from users who feel misled.
Platform Commissions
Both Apple and Google take a commission on in-app purchases: 30% for most developers, reduced to 15% for developers earning under $1 million annually (Apple’s Small Business Program) or for subscription revenue after the first year of a subscriber’s tenure.