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In app purchases meaning

In-app purchases (IAPs) represent a key monetization model employed by app publishers. An in-app purchase refers to any additional fee beyond the initial cost of downloading the app on smartphone devices/tablets. 

Definition of an in-app purchase 

As the name implies, an in-app purchase is a transaction conducted within an app. Prior to app installation, users commonly encounter the label “In-app purchases” alongside the “Get” button in the case of free apps and the price button for paid mobile apps. This notification signals that users may opt to pay for supplementary features, services, or content within the app. All transactions are processed through the app store. 

In-app purchases types 

The four categories of in-app purchases are as follows. 

1.Consumable Purchases 

Definition: Items or features that users can buy and use only once. 

Example: Virtual currency, power-ups, or one-time-use items in mobile games. 

2.Non-Consumable Purchases 

Definition: Items or features that users buy and retain permanently. 

Example: Unlocking premium content, removing ads, or purchasing additional features in an app. 

3.Subscription Purchases 

Definition: Recurring payments for access to content or features over a specified period. 

Example: Monthly or yearly subscriptions for premium content, services, or app functionalities. 

4.Auto-Renewable Subscriptions 

Definition: Subscriptions that automatically renew unless the user cancels. 

Example: Ongoing access to premium content or services with automatic renewal at the end of each billing cycle. 

In-app purchases examples across industries 

Gaming 

  1. Consumable Purchase: Buying virtual currency, power-ups, or extra lives. 
  2. Non-Consumable Purchase: Unlocking additional game levels, characters, or removing ads. 
  3. Subscription Purchase: Access to premium gaming features, exclusive content, or a subscription for ad-free gameplay. 
  4. Popular Apps: Clash of Clans, Candy Crush Saga, Call-of-Duty 
Related :   Understanding the Concept of Metagaming

Entertainment (Streaming services) 

  1. Subscription Purchase: Monthly or yearly subscriptions for premium content, ad-free streaming, or exclusive shows. 
  2. Popular Apps: Netflix, Amazon Prime Video 

E-commerce 

  1. Consumable Purchase: Virtual currency for discounts or limited-time promotions. 
  2. Non-Consumable Purchase: Buying exclusive product features, removing ads, or accessing premium content. 
  3. Popular Apps: Amazon, eBay, Flipkart  

Education 

  1. Subscription Purchase: Access to advanced lessons, study materials, or premium educational content. 
  2. Non-Consumable Purchase: Unlocking additional learning modules, features, or removing ads. 
  3. Popular Apps: Udemy, Coursera 

Fitness 

  1. Subscription Purchase: Monthly or yearly subscriptions for premium workout plans, personalized coaching, or advanced features. 
  2. Non-Consumable Purchase: Unlocking specific fitness routines, removing ads, or accessing premium content. 
  3. Popular Apps: MyFitnessPal, Nike Training Club, Google Fit 

News and Magazines

  1. Subscription Purchase: Access to premium articles, ad-free reading, or exclusive content. 
  2. Non-Consumable Purchase: Buying individual issues, unlocking unique features, or removing ads. 
  3. Popular Apps: Google News, In Shorts, Daily Hunt 

How do we ensure a safe in-app purchase user experience? 

Mobile apps can ensure secure in-app purchases by implementing robust encryption protocols, using secure payment gateways, and enforcing two-factor authentication. Utilizing tokenization for sensitive data, such as credit card information, adds an extra layer of security.  

Regularly updating and patching the app to address vulnerabilities is crucial. Implementing strict access controls and secure coding practices also mitigates the risk of unauthorized transactions. Educating users about secure purchasing practices and providing transparent privacy policies instills trust.  

Routine security audits and compliance with industry standards further enhance the overall security posture of the app, ensuring a safe and free in app purchase experience for users. 

Related :   DSPs Simplified: Marketing and Advertising Solutions

How NextGrowthLabs (NGL) can help you with IAP

Being a premier mobile marketing platform, NGL places a significant emphasis on in-app purchases. We assist app publishers in effectively measuring and overseeing in-app transactions. 

Our suite includes a buy verification feature and a robust fraud deterrent suite, empowering clients to identify and deter suspicious activities. This ensures our clients make informed decisions based on accurate data, fostering trust and security in their app monetization efforts.