Can I still use PayPal in the Android Marketplace now that Google has its own IAP payment mechanism?
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Answer:
No, you can't! Any transaction must be processed by google's processor! Our App RockPlayer has been suspended because of using PayPal and had been forced to remove it and to republish using new package ID. The dangerous part is that Google is not actively monitoring it. Guys operating android market do it when they are happy (or unhappy?). There are many apps used PayPal for near one year before our app was published, but almost all of them are killed in same batch. By default, operator will not explain exact reason, but if you ask them by email, maybe you will get it and don't argue too much, they will kill your account per our experience. Hope Google and PayPal may get the deal done before next run of killall.
Wu Yang at Quora Visit the source
Other answers
The short answer is Yes, you can. However, if you implement payments from a non-licenced Payment Processor there is a great chance for your app being suspended from the market. Have a look at this question:
Marin Kilyovski
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