I am currently developing an application where I want to be able to have an option to allow the user to donate money for the app. Is there a particular way about doing this
Like @alocaly said, you're unable to recieve donations through a system different from android market payment or ads inside the application.
However, it is still possible to have your application on the Internet by free and with a donation button. The difference is that you cannot post it on the Android Market, so you'll have to do some extra work:
However, you are able to do something that I've see out there: create a free version of your application and post it on the Android Market, and post another version of the same application called "Same program name (Donation)", costing some money. When someone wants to donate you, they'll only have to buy this version.
I hope it helps
I don't know what importance it has, but I think that the chart / terms of services we sign as android developers don't allow the usage of this kind of monetization. As this is a subject that is changing a lot in Android world, with the soon to come API to pay in apps, I'm not sure it still has any importance, but you should still be aware of that.
I think it should be possible.
There's a similar discussion on Google Groups which basically says that donations are allowed as long as you don't offer additional functionality for that money.
Meaning no functionality is enabled after the donation is made.
Maybe you should take a look at this post, which explains how to integrate Paypal payments into an Android App witout leaving the App itself: How to integrate paypal donate in android app?