Definition - What does In-App Purchasing mean?
Many in-app purchases occur in games, where users are able to purchase virtual goods for the game through the app itself. It provides a new measure of profitability for apps that are often free or very inexpensive.
Techopedia explains In-App Purchasing
Other types of in-app purchasing accommodations involve specialized currencies. Some of these virtual currencies may be much easier to code than actual cash transactions, which may require that merchant credit card processing arrangements be built into the app itself. Alternative virtual currencies can also help create easier purchasing setups for end users. However, any of these in-app purchasing systems will require an eventual transfer of funds, and security for both the actual transactions and the in-app fiat transactions.