In-App Purchase
An in-app purchase is a piece of content or feature purchased inside the app rather than the app store. For example, in a mobile game app, you may need to pay a fee and make an in-app purchase to unlock additional features.
While in-app purchases are made within the app, the app store controls the purchase, including billing. In addition, in-app purchases can be turned off on devices such as iPhone and iPad, preventing children from making uncontrolled purchases.
Over the last few years, we've seen an increase in the number of apps included in in-app purchases. In fact, the gaming industry is going through major changes as in-app purchases invade almost all areas of the industry. While in-app purchases have always been bundled with free apps and games, they're now very popular in all apps, including apps that you have to pay to download.
Types of In-App Purchase
Unlocked (Unlockables);
In-app purchases that unlock content or features are considered permanent; this means you don't have to buy them again once you buy them. This “unlockable” may include content such as an expansion to an eBook or a game, or features such as the ability to type in a word processor.
Expendables;
It mostly applies to games that are "free" but not completely free. The free-to-play model establishes an “in-game” currency such as gold coins or magic potions that can be used to unlock features or extend playtime. Most of these games (Zynga Poker, Temple Run, Candy Crush etc) allow you to multiply this currency by playing the game, but the rate of obtaining this currency can be very slow. This causes players to purchase in-app currency so they don't have to wait. This is just one type of expendable, but by far the most popular.
To find out more about game applications and gamification;