In-App Purchase IAP

A payment made inside a phone app through the store's own billing, where Apple or Google keep 15 to 30 percent of what the customer pays.

Also known as IAP store billing app store payment

Definition

An in-app purchase is a payment made inside a phone app, handled by the app store rather than by you. The customer taps buy, the store charges the card already on their account, and you receive what is left after the store's cut. That cut is usually 30 percent. It drops to 15 percent for smaller sellers and for a subscription after its first year.

The part that surprises shop owners is where the line sits. If you sell something that only exists inside the app, such as extra features, a paid plan, coins in a game or a course watched on the phone, Apple and Google require their own billing and their percentage. If you sell a real thing or a service delivered away from the phone, such as a dress, a delivery, a hotel night or a dentist appointment, you may take card or wallet payments yourself and the store takes nothing.

So a shop app is usually outside the fee and a content app is usually inside it. People get this wrong in both directions. Some pay 30 percent on physical goods they never had to. Others sell digital access through their own payment page and have the app removed, sometimes days before a campaign. Linkysoft has watched an app come down over a single button, and the review teams do read the screens.

There is a second trap. You cannot point the customer at your own website from inside the app to escape the fee. A line saying it is cheaper on our site has had apps rejected for years. Court cases in some countries have loosened this, and the rules keep changing, so ask before you build rather than after.

Whatever you charge, the receipt has to be checked on your own server, never on the phone alone. A phone can be tampered with, and fake receipts are sold openly. When Storek sells through an app, orders for real goods run on the shop's own payment provider, so the margin stays with the shop. Linkysoft settles this question in the first week of a mobile app project, because the answer changes the price of everything after it.

Questions about In-App Purchase

Do I have to pay 30 percent if I sell physical products in my app?
No. Physical goods and services delivered outside the phone may be paid for with your own card or wallet provider, and the store takes nothing from that money.
What counts as a digital item that the store must bill?
Anything the customer uses inside the app itself: extra features, a paid membership, coins, removing adverts, a video or a course watched on the phone. If it only exists on the screen, the store bills it.
Can I tell customers the price is lower on my website?
Not freely, and not everywhere. Some countries now allow a link out after court rulings, others still reject the app for it. Check the current rule for your market before you design the screen.
How do I stop people faking a purchase?
Send the store's receipt to your own server and ask Apple or Google to confirm it there. A phone can be changed by its owner, so unlocking a paid feature on the phone's word alone is how free accounts spread.
Who handles refunds for an in-app purchase?
The store does, and it can refund without asking you. Your system should listen for that message and close the paid feature again, otherwise you keep serving someone who has already had their money back.

Still not sure how this applies to your project?

Tell us what you are building and we will answer in plain language.