This is a classic Apple Sandbox related Error.
Instead of opening the In-App Payment processing window, it shares with Purchasely and old In-App Purchase.
To correct this you need to reboot your Sandbox Account
Kill the App
Navigate to the Sandbox Account management section of your phone.
Settings > App Store > Sandbox Account (bottom field) > Log-Out
Restart the App
Proceed with the In-App Purchase
Login screen pops-up
Login using Sandbox Account credentials (note - can be the same as before)