Google announces Wallet then gets sued by Paypal
May 31, 2011
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Last week in New York, Google announced that they were going to be introducing a new service called Google Wallet which is a mobile payments platform that will turn its Android smartphones into a digital wallet. When I say introducing a new service I do mean limited to a small amount of retailers in the United States and only initially in New York and San Francisco… But you have to start somewhere I guess.
The technology used is called Near Field Communications which Is more commonly abbreviated to NFC. The technology uses very short radio waves to allow devices to ‘talk’ to one another wirelessly. It works similarly to Bluetooth but over shorter distances, using less energy (usually) and doesn’t require pairing. Currently the main focus is on mobile payments but of course you can use NFC in a much wider context of any electronic transaction (door access systems, mobile ticketing, P2P contacts exchange, reading from passive RFID tags or ‘smart posters’). You can get a fuller technical description about NFC on Wikipedia.
Earlier this year it was rumoured that Apple were intending to incorporate the same technology into the iPhone 5/4s with Microsoft and RIM also intending to add it in future phones. Prior to the announcement the first NFC service was announced in the United Kingdom involving Orange and Barclaycard. The technology is already widely used in Japan.
But of course not everyone is convinced that contactless payments using a phone will replace cash or indeed is a safe way forward. Never mind the potential for the theft of your phone for unlawful use, there is also the potential here for Google to collect even more information on you than they already have and serve more ads in your direction. Of course if you are a Google user you know that they do this so it shouldn’t come as a surprise that they collect data on you but I don’t think i’ll adopt it until the first lot of “Oops we didn’t mean to collect that bit of data” fiasco’s are over and done with first.
Hold on a minute Paypal isn’t happy
So what’s Paypal’s beef then? It centres around the hiring of Osama Bedier, a former executive of Paypal, by Google as vice president of payments in January of this year. Paypal is now claiming that Google has now stolen its technology for turning smartphones into digital wallets.
Paypal is now a lawsuit against the search giant claiming that Mr Bedier was in job talks with Google at the same time as he was leading negotiations to make PayPal a payment option on Android. The company also claims that it spent three years trying to secure a deal under which it would create an NFC system for Android, only for Google to end the talks.
Google has not yet commented on PayPal’s allegations