Protecting In-App Purchases and Subscriptions from Fraud and Downtime

In-app purchases and subscriptions now sit at the heart of the digital economy. Whether in streaming, gaming, SaaS, fintech, or productivity tools, mobile apps increasingly rely on recurring in-app payments to generate and sustain revenue at scale. 

In 2023, consumers spent an estimated $45.6 billion on mobile app subscriptions. Growth has continued since then: by 2024, total global spending on in-app purchases and subscriptions reached around $150 billion, and forecasts suggest this figure could rise to approximately $233 billion by 2026. 

With this surge in monetization, however, exposure to risk has expanded as well. Payment fraud, failed transactions, and service interruptions have become some of the biggest threats to mobile revenue, often draining growth quietly. 

The new app economy and its risks 

The app economy has shifted decisively from one-time purchases to subscription and in-app purchase models, turning recurring billing into the primary monetization engine for many consumer and B2B apps. Subscriptions provide predictable revenue that supports continuous product development, richer content, and ongoing feature releases, creating a virtuous cycle of engagement and lifetime value. Customers benefit from this model as well, gaining ongoing access to valuable services without heavy upfront costs, which has helped normalize subscription spending as a routine part of digital life. 

At the same time, recurring billing has turned apps into always-on financial systems. Every user is connected to a stored payment method. Every renewal is a financial transaction. Every entitlement depends on real-time confirmation that a payment succeeded. In subscription apps, money and access are inseparable – and both depend on your payments working instantly and reliably. 

However, this success has made subscription apps and in-app purchasing flows prime targets for organized fraud and a new breed of performance and reliability risks. Mobile channels concentrate payment credentials, behavioral data, and high-frequency transactions, so any weakness – whether a security gap or a performance bottleneck – can quickly translate into revenue loss. 

The combination of always-on user expectations and evolving attack techniques means that merchants cannot treat fraud or downtime as occasional issues; they are persistent, structural threats that must be monitored and mitigated continuously. The new reality is that the health and security of payment systems directly determine metrics such as churn, lifetime value, and net revenue retention. 

Fraud: how criminal activity drains subscription revenue 

Because subscriptions generate ongoing revenue from stored payment credentials, they are especially attractive to fraud rings. But fraud in in-app purchases and subscriptions is no longer limited to stolen credit cards. Today’s attackers understand how subscription businesses work – and they target the systems that control billing, access, and refunds. Industry research suggests that the vast majority of mobile apps exhibit at least one security vulnerability, reflecting how easy it is for weaknesses to creep in as complexity grows.  

Common attacks include: 

• Using stolen cards or compromised wallets to purchase digital goods; 

• Exploiting free trials and introductory offers through fake accounts; 

• Refund abuse after consuming content; 

• Account takeovers that drain balances or trigger chargebacks. 

One of the most damaging forms of fraud in subscription apps is account takeover. When fraudsters gain access to a legitimate user account, they can make purchases that look normal on the surface. The transaction comes from a real device, a known IP range, and an established customer profile – which makes it far harder to detect than traditional card-not-present fraud. Once an attacker gains access to a valid account, they can drain digital balances, or trigger chargebacks. By the time the real user notices and disputes the charges, the merchant is left with refunds, chargebacks, and penalties.  

Another growing threat is promotion and trial abuse. Fraudsters use scripts, device farms, or stolen identities to create thousands of fake accounts, each claiming free trials or discounted offers. Even when the value of a single abuse is small, the cumulative cost across thousands of accounts can be enormous – and it directly reduces the revenue that marketing and growth teams are trying to generate. 

Refund abuse is also a major drain on subscription businesses. In digital products, there is often no physical good to return, which makes it easier for users – both malicious and opportunistic – to consume content and then claim a refund. Over time, this inflates refund rates and increases payment processing costs. 

All of this is particularly dangerous because fraud attacks the metrics that companies and their investors care about most: net revenue retention, chargeback ratios, and lifetime value. High levels of fraud cost money and make the business appear riskier, less predictable, and less scalable. High chargeback ratios affect more than just the company and investors; card networks may also impose restrictions on merchant accounts, leading to higher processing fees or even the risk of being unable to process transactions. 

What is clear is that securing in-app purchases and subscriptions is more complex than protecting a traditional web checkout. Modern apps are woven from multiple components: app store billing APIs, third-party SDKs, backend subscription platforms, payment gateways, analytics tools, and device-specific integrations. 

This makes fraud prevention no longer just about blocking bad transactions – it is about preserving the integrity of your revenue stream.  

Modern subscription businesses need fraud protection that goes far beyond basic rules. They need systems that evaluate transactions in real time using device data, behavioral patterns, and historical context – blocking abuse without creating friction for real customers. 

Discover how the latest innovations in API technology can empower your business to grow, adapt, and thrive.

Strategies and tactics to reduce fraud in subscription businesses 

Because fraud targets both payments and account access, the most effective defenses are layered and adaptive. There is no single control that can stop modern fraud on its own – but combining identity, transaction intelligence, and payment-level protections can significantly reduce both financial loss and customer friction. 

At the foundation is strong account protection. Since account takeover is one of the most damaging forms of subscription fraud, businesses should make it as difficult as possible for attackers to hijack legitimate users. This includes multi-factor authentication for sensitive actions, device recognition that flags unfamiliar devices, and monitoring for unusual login patterns such as rapid IP changes or impossible travel behavior. These measures do not eliminate fraud on their own, but they dramatically reduce the pool of accounts that can be abused. 

On the transaction side, subscription platforms need real-time fraud intelligence that goes beyond simple rules. Partner with payment providers such as 2Checkout (now Verifone) that use modern fraud engines which analyze a combination of signals, including device fingerprints, behavioral patterns, transaction velocity, historical purchase data, and location anomalies. This allows the system to distinguish between a loyal customer renewing a subscription and a fraudster attempting to monetize stolen credentials. High-risk transactions can be challenged or blocked, while low-risk customers move through without friction. 

Promotion and trial abuse require a different approach. Here, fraud prevention focuses on detecting patterns across accounts, not just individual transactions. Effective tactics include limiting the number of trials per device or payment method, identifying clusters of accounts that share behavioral traits, flagging unusually high redemption rates tied to specific campaigns, or checking eligibility criteria even after the account has been activated (if not possible in real time). This helps protect marketing spend and ensures that promotional offers drive real customer acquisition rather than automated abuse. 

Payment-level protections also play a critical role. Techniques such as tokenization, network-level fraud screening, and adaptive authentication (for example, 3D Secure applied only when risk is high) help reduce exposure to stolen credentials while keeping checkout and renewals smooth for legitimate users. When combined with intelligent routing and issuer-aware retry logic, these tools reduce both fraud losses and unnecessary declines. 

Together, these measures create a defense system that is not only harder to exploit, but also continuously improves as new data is collected. The goal is not to block every risky transaction, but to ensure that fraud becomes expensive and inefficient for attackers – while honest customers are barely aware that protection is even there. 

Here’s a recap of key fraud-reduction tactics:

• Multi-factor authentication, biometrics, secure password management and device recognition to limit account takeover 

• Real-time fraud and risk scoring using behavioral and device data 

• Pattern detection to identify large-scale trial and promotion abuse 

• Tokenization and secure payment handling to reduce exposure of sensitive data. Hint: PCI-compliant providers minimize direct card handling. 

• Implement clear, data-backed policies for refunds and chargebacks to discourage abuse. 

When these layers work together, they protect not just transactions against fraud, but the long-term health of subscription revenue. 

Discover how our advanced tech ensures secure transactions, reduces fraud, and enhances customer experience.

Downtime: the silent revenue killer in subscription businesses 

If fraud is an attack on revenue, downtime is its quiet twin – often more destructive, and far less visible. As a general term, “downtime” refers to a time period when an application’s essential services, whether internal or external, are unavailable due to scheduled maintenance, software updates, or unexpected outages.  

(To avoid confusion: here we mean system downtime, not the “screen time” or “digital wellbeing” user feature on mobile devices.) 

Subscription revenue depends on payments hitting at the right moment. Renewals can fail due to slow gateways, bank limits, insufficient funds, or temporary risk flags. Most failures aren’t true cancellations—smart retry timing, or dunning management, can recover many of these payments and cut involuntary churn. 

This creates a situation where technical glitches translate directly into lost customers. A user who wakes up to find their streaming service, SaaS tool, or mobile app locked may not try again. They may simply move on to a competitor. 

Industry studies consistently show that downtime costs digital businesses hundreds of thousands of dollars per hour, with mission-critical systems sometimes losing more than one million dollars per hour. In subscription businesses, the damage is even greater, because every failed renewal reduces not only today’s revenue but all future recurring revenue from that customer. That is why payment and subscription infrastructure must also be designed for resilience.  

When it comes to the payment and renewal process, downtime might look like this: 

• A checkout page that doesn’t load; 

• A payment authentication step that times out; 

• An automatic renewal that fails to process; 

• An entitlement update that never arrives. 

To the user, the result is simple: the service stops working, or they can’t complete a purchase. To the business, these are lost conversions, failed renewals, and involuntary churn – even though demand was still there. 

Unlike fraud, downtime does not show up as suspicious activity. It appears as: 

• Lower conversion rates 

• Higher churn 

• Declining renewal success 

• Increased support volume 

Designing for high payment availability and revenue continuity 

Protecting revenue also means designing the backend and payment stack for resilience and continuity. This requires infrastructure that can absorb failures. Load balancers, replicated services, and multi-region deployments help keep checkouts and renewals running even when parts of the system go down. Transaction-level monitoring is just as important, because a system can be “up” while payments are quietly failing. 

Recurring billing adds another layer of risk. A single failed renewal can pause access and trigger churn. Platforms like 2Checkout (now Verifone) reduce this with card updater services, smart retries, and intelligent routing that recovers payments that would otherwise be lost. 

When issues do happen, fast alerts and simple self-service tools let customers fix problems quickly instead of abandoning the subscription. 

Recommended practices include:

• Use a payments provider that supports billing and payments across multiple regions; 

• Track real transaction success, not just uptime; 

• Use card updater services and smart retry logic; 

• Keep backup gateways and payment routes available. 

Building a holistic, user-centric protection strategy 

The strongest protection for in-app purchases and subscriptions comes from treating security, reliability, and user experience as one system. When payment gateways, fraud tools, and subscription platforms work together, businesses gain a clear, end-to-end view of the customer journey – making it easier to detect anomalies, recover failed payments, and prevent churn. 

This approach also requires close collaboration between product, security, and operations teams, so that protection and resilience are built into every stage of the app lifecycle. For users, this should remain largely invisible: fast checkouts, reliable renewals, and clear communication build trust without adding friction. 

By continuously monitoring transactions, refunds, chargebacks, and performance, companies can adapt as threats evolve. In a market where customers expect subscriptions to “just work,” the apps that succeed will be those that treat fraud prevention and uptime not as costs, but as drivers of sustainable growth. 

FAQs 

1. Can strict fraud controls hurt conversion and customer experience?

They can, if applied indiscriminately. That is why modern fraud prevention relies on risk-based and adaptive controls. Low-risk customers should experience fast, frictionless payments, while only suspicious transactions are challenged or blocked. The goal is to protect revenue without creating unnecessary barriers for real users. Machine learning and AI-assisted tools go a long way in providing an optimized fraud control system. 

2. How do businesses detect trial and promotion abuse at scale?

By looking beyond individual accounts. Effective systems analyze device data, behavioral patterns, and campaign-level performance to identify clusters of fake or automated users. Follow-up checks to determine eligibility can also reduce promotion abuse. This allows businesses to shut down abuse while still offering legitimate customers attractive introductory offers. 

3. How do payment retries actually recover revenue? 

Smart retry systems resubmit failed transactions at times when issuers are more likely to approve them and route them through optimal acquirers. Combined with card updater services, this can recover a significant percentage of payments that would otherwise be lost. 

4. Why do app store and payment gateway failures affect entitlements?

Because access is tied to payment confirmation. If a renewal succeeds at the bank but fails to sync back to the app or subscription system, the user may be locked out even though they paid — creating support issues, refunds, and churn. 

5. How does app downtime affect subscriptions even when payments are working?

Even if payments succeed, app downtime can prevent users from accessing the service they pay for. When an app fails to load, features don’t respond, or content is unavailable, users perceive the subscription as broken. Repeated outages erode trust, increase cancellations, and drive negative reviews – all of which hurt retention and long-term revenue, even if the billing system itself remains operational.