In App Billing Not configured
If you are getting the following error when adding in app billing to your Android app, there could be one of a couple problems causing it.
1. Your app might not be configured for "in app billing". Make sure your manifest.xml file is requiring the "in app billing" permission.
2. Your version numbers might be out of sync. If your local versionCode is different than your published version that could prompt the error to show up. Keep the local and published versionCodes the same until everything is tested but dont forget to update prior to releasing the update onto the play store.
3. You are using an unsigned apk for testing. This one plagued me for a while as I was just needing to confirm my code was working properly and quickly built a debug package on Android Studio only to get the aforementioned error message. After some research it turns out that you need to sign the APK before installing it. You shouldnt have to upload the apk to the play store, just having it signed is supposed to be enough.
You will need to create a Google+ community (it doesnt have to be public though). Any users in this group will have access to your test APK's.
Edit: The app publisher Google account cannot make a purchase through its own account. You may need to create a second Google account to do any billing testing.