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Can Google Checkout be used to automatically charge a monthly subscription fee from customers?

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Yes, in beta: http://checkout.google.com/support/sell/bin/answer.py?hl=en&answer=63440

From the page:

The ability to process recurring charges or subscriptions using our API is currently available in beta. Subscriptions will allow you to charge customers on a regular basis with out additional input from your customer. If you'd like to implement this functionality, please view the integration tutorial in our Developer's Guide Beta Features page.

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