Definition of In-App Purchases

In-app purchases refer to goods or services bought from an app on a mobile service which includes devices such as smartphones or tablets.  Many in-app purchases are offered at no charge with the option to upgrade for a certain fee.  Developers will often add new features to the app but users will not have to download the app again as these features will be available on their current app.

In-app purchases allow users the option to upgrade their apps while in the app instead of having to use other marketing options.  An example would be if the app allowed users to skip a level if it was very difficult for a certain fee. The app developer also has the ability to let users view other content behind a paywall.  Users will not have to access a different site in order to make that app purchase.  App stores such as Google Play or iTunes will let users download apps that have in-app purchases, but will let the user know that there are in-app purchases available.  Some apps will include a refund policy where terms and conditions do apply and some app stores will take a small amount of the in-app sale.

Security Issues

Security issues with in-app purchases may be a concern especially as they are made through a mobile network.  This is especially true if the user has not chosen a strong enough password or if financial information is not properly protected, the same as it would be when playing online blackjack casino games, or any online games for real money.  Most apps will send users a receipt after an in-app purchase which helps them keep track of in-app purchases.  Regulators have been looking at in-app purchases mainly because many children have access to mobile devices and purchase in-app purchases without informing their parents.

Types of In-App Purchases

There are various types of in-app purchases.  Consumables include such in-app purchases as mobile game currency, hints, extra health or experience points or the option to export to a new file format.  Users will need to buy these each time they need or want them and they cannot be downloaded for free.  If an app is removed or reinstalled it is possible that the consumable in-app purchases will be lost.

Non-consumable in-app purchases include upgrades, removal of advertising, unlocking a game, extra hints, characters, accessories, bonus levels and city map guides.  These can be bought and also transferred to any other devices with the same ID.  These may be available for free download if the user loses any of these.

Non-renewing subscriptions are in-app purchases such as a sports season pass or subscriptions valid for a certain amount of time.  This content is available for a certain period only depending on which app it is and can be bought again when the subscription expires.  Auto-renewing subscriptions include newspaper or magazine subscriptions or other services like Netflix and Hulu as well as games.  These can be purchased for a certain amount of time and the option for automatic renewal is given.

Understanding how in-app purchases work and the different types will ensure that users are well-informed and understand how the process works especially with regard to security of making these purchases.

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