PayPal sues Google over m-commerce trade secrets

27 May 2011

Just a day after Google unveiled its NFC mobile wallet, it has emerged the world’s biggest online payments player PayPal is suing Google for allegedly ‘misappropriating trade secrets’ from PayPal’s mobile payments business.

PayPal has filed a lawsuit in California alleging confidential information was taken by an employee – Osama Bedier – who leads Google’s efforts to bring retailers’ point-of-sale functions up to speed with developments in mobile commerce.

PayPal also alleges another colleague of Bedier’s, Stephanie Tilenius, breached contractual obligations by recruiting Bedier.

Google yesterday launched its new NFC mobile wallet service, simply known as ‘Wallet’, that will enable users to ‘tap, pay and save’ via coupons and in-store purchases.

Wallet will only support Citi Mastercard and a Google prepaid card and will work wherever a contactless MasterCard ‘PayPass’ is installed. Retailers signed up include Subway and Toys ‘R Us. The first phone to work with the Wallet will be the Nexus S 4G and other manufacturers’ phones will soon have the capability.

The battle for the mobile storefront

PayPal is a force in mobile payments and its mobile payments apps have been downloaded more than 30m times. One of its apps, PayPal Bump, allows iPhone users to give each other cash by bumping the phones off one another.

It is understood that PayPal is particularly irked because Bedier discussed a job with Google while at the same time leading negotiations to make PayPal a payment option on Google’s Android market.

Meanwhile, Tilenius is understood to have been under contract not to recruit employees but according to PayPal she nevertheless recruited Bedier.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years