In-App Purchasing

DEFINITION of 'In-App Purchasing'

The purchase of goods and services from an application on a mobile device, such as a smartphone or tablet. In-app purchases allow developers to provide their application for free, while providing anyone who downloads the free version the opportunity to upgrade. Because the developer can always add new features and content to the application after it is downloaded, application users won’t have to download a different application later.

BREAKING DOWN 'In-App Purchasing'

In-app purchasing allows application owners the ability to upsell application users from within the application itself, rather than through other marketing channels. For example, a game application may offer the user the ability to skip a particularly difficult level for a fee. The owner may provide consumers with the ability to view premium content that is behind a pay-wall. Consumers making purchases through an application do not have to visit a separate website to conduct the transaction.

Some application stores, such as Google Play or iTunes, allow users to download applications that allow in-app purchasing, but typically let the user know that an application has this feature. Some have policies allowing refunds if they are requested soon after a purchase is made. Application stores often take a percentage of the in-app sale.

Because in-app purchases are conducted through a mobile device, unauthorized purchases can result in security issues. This is especially the case if the username and password used in the application are not strong, and if credit card information is stored in the app in an insecure manner. Many applications will email a receipt after a purchase is made, which can allow a fraudulent purchase to be stopped.

Regulators have taken a keen interest in in-app purchasing. One of the primary reasons for this is because many children have access to smartphones, and children may make in-app purchases that their parents do not want.

RELATED TERMS
  1. Mortgage Application

    A document submitted by one or more individuals applying to borrow ...
  2. Loan Application Fee

    A fee charged to process an application for a loan, such as a ...
  3. Enterprise Application Integration

    The translation of data and other commands from one application ...
  4. Borderline Risk (Insurance)

    An insurance policy applicant that an insurance company has not ...
  5. Correction Notice

    A notice indicating that a process or application contains errors ...
  6. Cover Letter

    A written document submitted with a job application explaining ...
Related Articles
  1. Managing Wealth

    How Does Hinge Work and Make Money?

    Learn about Hinge's business model and its competition in the dating app field. Find out in which cities Hinge currently offers its services.
  2. Insights

    Goldman Sachs Gets 250K Internship Applications (GS, BAC)

    According to the Financial Times, Wall Street investment banks saw a flood of applications for summer internship positions.
  3. Managing Wealth

    Common Interview Questions for Project Managers

    Discover the basic skills needed for a position as a project manager along with common interview questions used in applying for such a position.
  4. Insights

    What Facebook Owns That Other Social Media Do Not (FB)

    Examine Facebook's competitive advantage to understand how the network effect and application suite set it apart from other social media platforms.
  5. Professionals

    What Gets You In Grad School: GPA Vs. Work History

    Grad schools usually take a holistic approach when evaluating applicants. That means it's a good idea to scrutinize every aspect of your application.
  6. Financial Advisor

    Applying To Graduate School: What’s Important?

    While the benefits offered by a top-tier graduate school are well known, the application process is more of a mystery.
  7. Markets

    Why It's Still Too Soon to Sell Netflix

    Netflix (NASDAQ: NFLX) shares are down nearly 15% this week after the company released its first quarter results. Despite the bearish climate, a new research report from App Annie indicates ...
  8. Personal Finance

    What's The Cost To File A Patent?

    When filing a patent, be ready to pay attorney fees, filing fees and other related expenses. Usually the total bill is a few thousand dollars.
  9. Entrepreneurship & Small Business

    The World's Top 10 Mobile Ad Companies

    There is a plethora of mobile ad companies ready to help with your ads for a cut of your income. Here are 10 mobile ad companies with the soundest platforms and highest ratings.
  10. Personal Finance

    The Complete Guide To Becoming A Landlord: Finding Tenants

    A challenge that most landlords face is finding reliable tenants to fill their rental properties. Ideally, a tenant will be willing and able to pay his or her rent in full and on time each month, ...
RELATED FAQS
  1. How do I apply for Social Security retirement benefits?

    Understand the process of applying for Social Security benefits, the kinds of information and documentation you need, and ... Read Answer >>
  2. Can a foreign individual open a savings account in the United States?

    Find out what it takes for a foreign individual to open a savings accounts in the United States in an age of heightened awareness ... Read Answer >>
  3. When an applicant submits a registration application, under the USA, it must include ...

    A. Has made an application to serve legal papers on behalf of the state's AdministratorB. Has empowered the state's ... Read Answer >>
  4. How can I request a Social Security disability award letter?

    Learn about award letters and how to apply for Social Security disability benefits. Gain insight as to why disability applications ... Read Answer >>
  5. How do I track my pending application for Social Security benefits?

    Understand the simplest way to follow up on your Social Security benefits application and the basics of eligibility and payment ... Read Answer >>
  6. What is the average credit score for new homebuyers? (ELLI)

    Learn the average FICO score of approved and denied home loan applications, and find out how your credit score measures up ... Read Answer >>
Trading Center