PayPal just launched its Mobile Payments Library for the Android OS, allowing developers to include in-app payments into their software without having to worry about keeping customers’ personal financial information secure. This means that soon you’ll be able to make PayPal transactions on your Android device without having to leave the application that you’re using.

This is pretty convenient for Android users. You can even purchase a pizza using PayPal as illustrated in the image above. But does this in-app PayPal payment method violate the Android Market Content Policy for Developers? It states that “developers should only charge for applications and downloads from Android Market through the Market’s Payment Processor”.

Apple has announced that they will be allowing free apps to enable in-app purchases. With this update, developers will be able use their free apps as a method to get users to install it and then charge them for content like add-ons etc.

It will certainly be interesting to see how this affects the whole pricing structure of the App Store. It’s a new business model for the App Store. It’s great for developers, but will consumers like this? We will see. Things are likely to get more costly for everyone.