Not sure as to why Construct 2 IAP didn't work. I believe it was something on Google Play side of the house, maybe an update that was not incorporate d into C2, but in C3 that issue was fixed.
Ashley - Is this correct? I've been trying to get IAP working on Construct 2 with PhoneGap for about a week now. Is the solution to upgrade to Construct 3? When I try to upload any app with the IAP plugin included to PhoneGap, I get an error saying:
"Error - One of your plugins requires a parameter: BILLING_KEY - You can fix this here"
According to the OP, they just did the exact same thing on Construct 3 and it worked without them seemingly needing to jump through hoops.
*EDIT - I should add, the "You can fix it here" just takes you to the plugin section... which either creates a malformed config file or doesn't fix the Billing Key issue.