What Does In-App Purchase Mean? Types, Fees and Examples

If an app listing says “Offers In-App Purchases,” it means you can buy extra digital content, features, virtual items, or subscriptions from inside the app after downloading it.

The app itself may still be free. You might also be able to use its main features without paying anything. The label simply tells you that optional purchases are available.

For app owners, “in-app purchase” has a more specific meaning. It usually refers to a digital purchase processed through Apple’s or Google’s billing system.

The app store handles the payment, and the developer may pay a commission on the sale.

Physical ecommerce purchases work differently. If someone buys clothing, cosmetics, food, furniture, or another physical product through your app, the transaction isn’t treated as an in-app purchase by Apple or Google. You can use your normal ecommerce checkout and payment provider.

Let’s look at what counts as an in-app purchase, how the different types work, and which fees apply.

What Is an In-App Purchase?

An in-app purchase, often shortened to IAP, is a purchase made from within a mobile app to unlock or access something digital.

Common examples include:

• A monthly subscription to a news or streaming app
• Extra lives, currency, or power-ups in a mobile game
• Premium filters in a photo-editing app
• An ad-free version of an app
• Additional storage or usage credits
• A one-time upgrade that unlocks the full app

These purchases are separate from the initial app download. A free app can offer paid extras, while a paid app can also include additional in-app purchases.

Apple and Google show this on the app’s store listing, so you know before downloading that the app may ask you to pay for extra content or features.

What Counts as an In-App Purchase?

The key distinction is usually whether the purchase is for something digital that you use or consume inside the app.

Examples that normally count as in-app purchases include:

• Digital content, such as articles, videos, music, or ebooks
• Virtual goods, such as game currency, characters, or cosmetic items
• Premium app features
• Subscriptions that provide access to digital content or services
• Credits that are spent inside the app

Purchases of physical goods or real-world services are different. Ordering a pair of shoes, booking a hotel, paying for a food delivery, or buying a ticket to an in-person event doesn’t normally use Apple In-App Purchase or Google Play Billing.

That distinction matters because digital purchases may be subject to app store billing rules and commissions. Physical purchases aren’t.

The Four Main Types of In-App Purchase

Apple groups in-app purchases into four main categories. Google uses slightly different terminology, but the same basic models apply.

Consumable Purchases

Consumables can be used up and purchased again.

Examples include game currency, extra lives, hints, usage credits, or temporary boosts. Once the user spends the item, they need to buy more if they want to use it again.

Non-Consumable Purchases

Non-consumables are bought once and don’t expire through use.

This could be a permanent ad-free upgrade, a new game level, a set of premium filters, or lifetime access to a feature. The user shouldn’t need to buy the same item again after reinstalling the app or switching to another supported device.

Auto-Renewable Subscriptions

Auto-renewable subscriptions provide access for a set billing period and continue until the user cancels.

Common examples include monthly or annual subscriptions for streaming, news, fitness, productivity, or education apps.

Non-Renewing Subscriptions

Non-renewing subscriptions provide access for a limited period but don’t renew automatically.

Examples might include a season pass, temporary access to a course, or a one-year archive subscription. The user needs to buy it again when the access period ends.

Apple’s current In-App Purchase documentation provides the official definitions for all four types.

Examples of Apps with In-App Purchases

Here are a few mobile applications using different kinds of in-app purchases:

The Medium app uses in-app purchases in the form of auto-renewable subscriptions, which gives access to premium articles.

Candy Crush offers in-app purchases for in-game consumable items, and options such as skipping levels or extended use once your free time has run out.

The Way of Life app is free, but gives unlimited habit tracking for a one-time payment. This is an example of a non-renewable subscription.

How In-App Purchases Work

The exact flow depends on the app, but a typical in-app purchase works like this:

1. The app shows a product, upgrade, or subscription.
2. The user chooses to buy it.
3. Apple or Google displays the purchase confirmation screen.
4. The user approves the payment using the account and payment method connected to their device.
5. The app verifies the purchase and gives the user access to the item or feature.

Because the transaction goes through the app store’s billing system, the developer doesn’t receive the user’s full payment details. Apple or Google also handles parts of the payment experience, including local currency display, receipts, subscription management, and some refund processes.

Developers still need to set the purchase up properly. That includes verifying transactions, restoring eligible purchases, handling subscription changes, and making sure users get what they paid for.

How Much Do Apple and Google Charge for In-App Purchases?

There isn't one universal app store fee that applies to every developer, product, and country.

Apple’s standard commission on digital goods and services is 30%. A 15% rate applies in several cases, including qualifying developers in the App Store Small Business Program and qualifying subscriptions. Other rates and terms can apply in specific storefronts or programs.

Google also uses different service fees based on the type of transaction, the developer’s earnings, the app’s distribution arrangements, and the programs the developer joins. Google revised parts of this structure in 2026, so an old blanket statement such as “Google takes 15% of the first $1 million and 30% after that” is no longer a reliable summary for every app.

If you’re building a financial model for an app, check Apple and Google’s current terms for every market in which you plan to sell. The broad principle is still simple: app stores normally charge a fee when they process the sale of digital goods or services, but the exact rate depends on your circumstances.

Do Ecommerce Apps Pay In-App Purchase Fees?

Here's the important thing to note. If you're an ecommerce brand, the in-app purchase rules don't apply to your physical product sales.

Ecommerce stores don’t pay Apple or Google a commission when they sell physical products through a mobile app.

Apple’s guidelines say apps selling physical goods or services consumed outside the app need to use a payment method other than Apple In-App Purchase. Google says the same thing: Google Play Billing is for digital items, not physical goods and services.

That means an ecommerce brand selling clothing, beauty products, supplements, furniture, groceries, or similar goods can continue using its existing checkout. The normal payment processing and platform fees still apply, but there isn’t an additional App Store or Google Play commission on the order.

This is important if you’re considering a mobile app for your ecommerce store. Customers can shop and check out inside the app without Apple or Google taking a percentage of your product revenue.

MobiLoud apps use your existing ecommerce experience and checkout, so your products, payment methods, promotions, and integrations continue to work in the app. We also help manage the app submission process and address App Store or Google Play requirements before launch.

Benefits of In-App Purchases

In-app purchases give developers a flexible way to monetize an app without charging every user upfront.

The main benefits are:

• A lower barrier to download. You can offer a useful free experience and charge only for upgrades or additional value.
• Several ways to monetize. One app can combine subscriptions, permanent upgrades, and consumable items.
• A familiar checkout. Users can pay through the account already connected to their device.
• Revenue can scale with usage. Your most engaged users can buy more features, content, or credits.
• Built-in subscription management. Apple and Google provide tools for recurring billing, cancellations, and account-level purchase history.

Drawbacks of In-App Purchases

In-app purchases also come with tradeoffs:

• App store fees reduce your revenue. The applicable commission needs to be included in your pricing and margin calculations.
• Billing rules can be complicated. Requirements vary by store, product type, market, and program.
• Poorly designed paywalls can frustrate users. People may feel misled if the free version is too limited or the cost isn’t clear.
• Revenue can be uneven. Many free users will never make a purchase.
• You need to handle purchases reliably. Failed verification, missing entitlements, or subscription errors can quickly damage trust.

The model works best when the free app provides real value and the paid option offers a clear, understandable upgrade.

Can You Use Another Payment Method for Digital Purchases?

Sometimes, but the rules depend on the app and the user’s storefront.

Apple now allows apps in the United States storefront to include buttons, external links, or other calls to action that direct users to alternative purchase methods. Different entitlement and disclosure rules apply in the European Union and several other markets.

Google also supports alternative billing or external purchase programs in certain markets and circumstances. These options may still involve service fees and specific technical or reporting requirements.

This isn't an area where a generic workaround will do. Check the current rules for each storefront before adding an external payment link or steering users away from the store’s billing system. Apple’s App Review Guidelines and Google’s Play Billing documentation are the best starting points.

Frequently Asked Questions

Does “In-App Purchases” Mean the App Costs Money?

Not necessarily. The app may be free to download and use. The label means it offers optional paid content, features, items, or subscriptions after installation.

Is a Subscription an In-App Purchase?

Yes, when you subscribe to digital content or app functionality through Apple’s or Google’s billing system. Subscriptions can renew automatically or run for a fixed period without renewing.

Are Purchases From a Shopping App Considered In-App Purchases?

Not when you’re buying physical goods or real-world services. A clothing order or grocery delivery may happen inside an app, but it isn’t an “in-app purchase” in the app store billing sense.

Does Deleting an App Cancel an In-App Subscription?

No. Deleting the app from your phone doesn’t normally cancel an active subscription. You need to manage or cancel it through your Apple or Google account, or through the service’s account settings where applicable.

Can You Restore an In-App Purchase?

Non-consumable purchases and active subscriptions can generally be restored when you reinstall an app or move to another compatible device using the same account. Consumable items usually can’t be restored after they have been used.

The Bottom Line

An in-app purchase is an optional payment for digital content, features, virtual items, or subscriptions inside a mobile app. The app may be free, but you can pay for more if you want it.

For app owners, the most important question is what you’re selling. Digital items are generally covered by Apple and Google’s billing rules. Physical goods and real-world services aren’t, which means ecommerce brands can keep using their existing checkout without giving the app stores a cut of product sales.

If you want to turn your ecommerce website into an iOS and Android app, MobiLoud can handle the build, App Store submission, and ongoing app maintenance while keeping your existing storefront and checkout intact. Book a consultation to discuss your app.