Paypal was already under siege by startups like WePay and Square, but with Google announcing the new Google Wallet platform powered by NFC, it now has a very major competitor in the mobile payments segment.
Today, Paypal announced that it had filed a lawsuit against Google and Osama Bedier, the former VP of Platform, Mobile at Paypal who now works at Google.
Apparently, Bedier was heading the charge for Paypal’s new mobile payments offering, in which Google would be partnering with it. What happened was, Google poached Bedier and dropped those negotiations, instead launching its own mobile payments offering.
Paypal is now alleging that Bedier misappropriated trade secrets from Paypal, to help build Google’s offering. Paypal says that it was working on the lawsuit since Bedier quit, but it seems that Google’s mobile payments announcement may have triggered it, and with good reason – the mobile payments market is expected to reach $630 billion by 2014. Paypal will definitely try to keep Google from getting a huge head start.
Google has tried to compete with Paypal before, in the form of Google Checkout, but failed badly. This time around, it does seem to have a great offering. Also, Paypal hasn’t really entered the mobile payments arena yet, so Google may have a really good chance of dominating the segment.
I expect Paypal to soon make an announcement about its mobile payments offering. Whatever happens to the lawsuit, having two competing giants in the space is definitely great news for the consumers.