Of course, there are microtransactions. While the main story is playable without needing to spend money, players must make Wishes in order to get the best characters and weapons. The Wish banner system is where players can spend real-world money. However, it is a bit obtuse and difficult to understand, so here it is explained more clearly.
First, it is important to know that Genshin Impact uses gacha (gambling) mechanics, and it can be addictive. There is a reason that upon launch, it made over $60 million in a week just on mobile devices.
By using the Wish banner system, players can gamble on weapons and characters. Weapons gained from Wishes will always be from 3 to 5-stars, and the characters are 4 or 5-stars. The higher the number of stars, the higher the rarity and the higher its max level.
The Wish banners use what is known as the pity system. If the player has not gotten a 4-star item in nine Wishes on a banner, they are guaranteed to get a 4-star or higher item for the tenth Wish. If a player does not win a 5-star item for 89 rolls, the 90th item will be guaranteed 5-stars. Players can have better luck though. It’s possible but extremely unlikely that a player could get something like three 5-star characters in a row. As the drops are random, if a player is looking for a specific character or weapon, odds are not in their favor.
However, periodically the game has special event Wish banners that increase the chance of getting a certain character or weapon, unlike the standard Wish banner. Furthermore, if a player using a special event Wish banner has not gotten one of the characters featured on the banner within 90 tries (they got another 5-star character instead), they will get one of the characters on the banner on the next 90th try. This means they are guaranteed to get a character featured on the banner in 180 Wishes or less. Weapon Wish banners are slightly different, at 80 and 160 instead.
Wishes are bought using either Acquaint Fate for the standard banner, or Intertwined Fate for the special event banners. While players can get these through normal gameplay, they can also be purchased for 160 Primogems, which again can be found in the game. Genesis Crystals are purchased with real money and can be used to then buy Primogems at a 1 to 1 conversion rate.
It is not difficult for players to have a good party with decent weapons without the need to spend any money. However, in order to get the most powerful characters and weapons, players will likely have to shell out cash.