From the current docs for Google in app purchase: http://developer.android.com/guide/market/billing/billing_ov... "You can use in-app billing to sell only digital content. You cannot use in-app billing to sell physical goods, personal services, or anything that requires physical delivery."
I'd check the terms and conditions of the stores about using other payment gateways as well
http://www.android.com/us/developer-distribution-agreement.h...
Payment Processor(s): Any party authorized by Google to provide payment processing services that enable Developers with optional Payment Accounts to charge Device users for Products distributed via the Market.
However the advantage of the Android platform is that the market is not the only app store available and also app stores are not the only means of distribution