📱 Mobile

In-App Purchase (IAP)

iap · in-app purchase · in app purchases · storekit · google play billing · app store purchase

Definition

An in-app purchase is a built-in monetisation mechanism inside a mobile app that runs through Apple's or Google's official payment systems and covers digital goods, subscriptions and consumable units.

What an in-app purchase is

An in-app purchase (IAP) is the mechanism for buying digital goods inside a mobile app through
Apple’s official payment system (StoreKit) or Google’s (Google Play Billing). The whole billing
layer — storing payment details, processing the transaction, issuing the receipt — sits on the app
store’s side.

For the customer the flow is as short as it gets: tap buy, confirm with Face ID or Touch ID, done.
No payment details to enter anywhere.

The three types of IAP

Consumable — used once and gone. Typical of games (in-game currency, lives, boosts), but they
appear in e-commerce too: one-off access to a closed sale, or credits for additional services.

Non-consumable — unlocked permanently at purchase. Examples: removing ads, extra filters in the
app, unlocking a content category.

Subscription — renews automatically on a set period. The most common type in commercial apps:
premium membership, access to exclusive prices, free delivery.

Commissions and the economics

Platform	Standard	Small business / second subscription year
Apple App Store	30%	15%
Google Play	30%	15%

The commission changes the unit economics of a subscription model materially. On a subscription of
$4.99 a month with Apple’s 30% commission, the retailer receives $3.49 — worth accounting for when
pricing an IAP.

Important: Google and Apple process IAP in their own currency and handle VAT remittance
themselves in many jurisdictions. That simplifies tax accounting but complicates custom
bookkeeping.

IAP in e-commerce: where it applies and where it does not

IAP is mandatory for digital goods and services in mobile apps — an Apple and Google rule whose
breach leads to removal from the store.

Physical goods (clothing, electronics, groceries) cannot be sold through IAP; the stores
prohibit it explicitly. Transactions on physical goods run through the retailer’s own payment
gateway. In practice that means an IKEA, Amazon or Best Buy app pays no App Store commission on each
sale.

The usual IAP scenarios in e-commerce:
– A membership subscription in the style of Amazon Prime or Walmart+ that carries bonuses and free
delivery
– One-off access to a closed sale
– Digital gift cards (in some jurisdictions)

Integration: StoreKit and Play Billing

On the app side, an IAP integration covers:
1. Registering products in App Store Connect or Google Play Console with prices and localisations
2. Requesting the list of available products through the SDK
3. Starting the purchase and handling the callback (success, error, restore)
4. Verifying the receipt server-side to guarantee the transaction is real

Server-side receipt verification is not optional: without it, an attacker can forge a local callback
claiming a successful purchase.

Frequently asked questions

Why do e-commerce apps not use IAP for physical goods?

Apple and Google prohibit IAP for physical goods — both platforms state it explicitly in their rules. A clothing or electronics retailer takes payment through its own gateway, not through StoreKit or Play Billing. IAP applies only to digital goods.

What commission do the stores charge on IAP?

Apple takes 30% from most developers and 15% from small businesses (under $1M a year) and on subscriptions after the first year. Google has a similar structure: 30% as standard, 15% for subscriptions and small businesses. The commission is calculated on the transaction amount including tax.

What is the difference between consumable and non-consumable IAP?

Consumable: items that disappear once used — in-game currency, extra attempts, one-off boosts. They can be bought again. Non-consumable: unlocked permanently — removing ads, extra functionality, paid themes. Subscription: a recurring payment for a period.

How is IAP used in e-commerce subscription models?

Membership programmes — VIP tiers, premium price access, free delivery — are often monetised through IAP on mobile platforms. The person pays for the subscription through the App Store, the retailer receives 70–85% and Apple 15–30%.