Hi shashkiranr,
I had same problem with my app, which was published in alpha testing. According to google it does not matter, whether your app is in alpha or beta testing, in both cases payments (non-real) are allowed.
See
http://developer.android.com/google/play/billing/billing_testing.html.
When your In-app Billing implementation is ready, you can test purchasing of your in-app SKUs in two ways:
- Test purchases, which let your selected license-test users purchase your in-app products without any resulting charges to the user. Test purchases can be used in alpha/beta releases or in published apps.
- Real purchases, which let regular users make real purchases of your in-app products with actual charges to the user’s payment instruments. You can use Google Play’s alpha and beta release groups to manage the users who can make live purchases using your implementation.
But, after many investigations, what could be the reason of the "Authentication required" error, I have realized that I had not put any product among In-app products (in Google Play Developer Console) - and that was root cause of the error message. When I insert test product there, everything worked smoothly.
Maybe helps someone...