My understanding is that Candy Crush found its early success by letting users pay really small amounts of cash on a continual basis.
If that was successful then, why don't mobile app developers use that payment model now?
On average, a small fraction of users will make in-app purchases. On the other hand, everybody sees ads. Many freemium games will have a combination of both, but if your game’s design doesn’t call for a virtual economy, then forcing one into it is not going to get people to use it.
For example, a game may be simple enough that there is nothing the user needs to purchase. However, if it’s an infinite progression game, then if the user dies, almost nobody would pay $.99 to keep playing, even if they got really far. On the other hand, watching an incentivized video ad for 30 seconds is a much easier pill to swallow. Depending on the ad, it can pay around a few cents per view. If you can get many people to watch video ads multiple times a day, that adds up a lot faster than a small percentage of users paying money to buy a contrived virtual currency.
On the other hand, some games will offer both options. If you have more time than money, you take the ads route. If you view your time as more valuable, you might just pay money to remove or skip certain ads.
Very small transactions are used not for money source, but making player more willing to pay.
For example, at the very start player don't want pay money. Especially for 1000 crystals with price of 50$.
But after 1 hour of gameplay this game can give him a special exclusive one time offer: 500 crystals for 0.50%. Wow! That's cheaper in 50 times! So player make his first payment and now he is the player who spend some money. So in future he will be much easier to make decision to pay little more and more, and more.
The key to CC's success was that the game was not always winnable, and whether a level was winnable or not depended on the random setup of the level. Some levels had a much smaller chance of being winnable. These were followed by easily winnable levels.
So the player felt like they were doing ok, winning levels, then they got stuck. The game pushed the pay-ways to win: buy powerups, buy more turns, etc. If the player paid to get past that level, they were rewarded with a bunch of easy-to-win levels.
It is this addiction mechanic that made CC a massive hit.
I also suspect that many players can't tell the difference between the effect their skill has and the effect the random setup has on whether they win or not.
As A. Denis said in his answer, one tactic many games use is to overprice everything then run periodic massive discounts to make it seem like a good deal. Bejeweled Blitz did this. They would periodically run 90% off sales where you could buy a ton of coins for $1.