Android platform group manager Eric Chu, speaking Tuesday at the Inside Social Apps conference in San Francisco, said that Google is "not happy" with the number of paid applications being downloaded through the Android Market, especially given that 300,000 devices are being activated every day. He also today that in-app payments were coming to the Android Maket and that developers should "stay tuned" for more information. It seems that Google will be giving developers several different payment options including carrier billing and the standard Google Checkout. He also mentioned that other payment services were being looked into, so don't be surprised if PayPal gets support as well. 

Chu also assured the fears of users on older versions of Android by saying that majority of current devices would be compatible. About 85 percent of devices are on Android 2.x right now, so it seems likely that any user with Android 2.1 Eclair or above will be good to go. Google had originally wanted to get in-app payments deployed last year, but developers were too "busy with their Christmas applications" to give Google enough feedback.

In-app payments offer an alternative for developers looking to make money from their apps rather than having to charge for the initial download or rely on ad revenue. This should help attract more developers to the Android platform and ensure that we see even more high-quality apps -- especially games -- land in the Market. [SF Gate, TechCrunch