Apple has significantly improved the usability of paying for an application. Apple has made it drop dead simple for developers to charge for applications and for consumers to purchase applications. For developers, there’s no need to build a billing system, register for a payment processor, deal with chargebacks, etc; Apple makes charging for an application as easy as deciding on a price. For consumers, there’s no need to find your wallet, enter your CC#, create an account, etc when purchasing an app on the app store; all that info is stored in your Apple Account after your first purchase. That’s why “free” is no longer the most popular price on the App Store, because Apple has solved many of the usability problems that previous caused the friction which created The Penny Gap.
— Andrew Parker on why people are paying for iPhone applications (via betaworks)