Google and two of its executives are being sued by EBay’s online payment unit, PayPal, which claims they stole trade secrets related to mobile payment systems.
PayPal and Google had been working together on these kind of payments and both of those named in the law suit are a former long term PayPal employee who have now joined Google.
The law suit came as Google and a group including MasterCard, Citigroup and phone company Sprint unveiled a system for shoppers to use their mobile phones to pay for purchases at the checkout counter.
Chris McWilton, MasterCard’s head of US markets, explained how it works: “Your phone will have a chip in it, which enables you to basically wave it past a terminal and it will communicate, in a secured manner, the information in the wallet – which includes your credit card, or prepaid card information – to the terminal and it will flow through the system just like a normal transaction.”
Mobile phones are seen as the digital personal wallets of the future. Technology research firm Yankee Group says payments using them will jump from 115 billion euros last year to 703 billion by 2014.
In Japan pay-by-phone technology is common in shops and even vending machines – now it is starting to roll out in the US.
The Google system will compete with plans by Visa and other top US banks and mobile phone companies.
Google has signed up retailers including department store Macy’s, American Eagle Outfitters and fast food chain Subway to blend the service with loyalty programmes and discount offers