Google Play In-app Billing API version is less than 3

In-app Billing API version goes with the Google Play Store and v3 is actually quite old (at least 3 years old)

PBL will check user's client version and will return this error message if their devices have a very old Play Store installed on their devices. If you're migrating from AIDL to PBL and you didn't check client's billing API version before, you could end up with seeing users reporting this issue.

You shouldn't expect this error message if you're upgrading from PBL 1.x to 2.0 because PBL 1.x is newer than v3 and it will also do this check. You may want to file a bug to the Google team in this case.

I started seeing this error when using the Emulator without logging into Google Play.
Once I logged into Google Play with my account the error went away.

It was normal, because at that moment it is not connected to any Google account.

So make sure you have an emulator with Google Play services.

-> Go to Google Play and enter your account credentials. After you close and reopen the app.