PayPal sues Google over new mobile wallet technology

A special chip in smartphones allows user to pay for items by swiping handset over a paypoint.

PayPal has filed a lawsuit against Google for allegedly stealing its digital wallet technology for smart phones.

PayPal claims that its former executive Osama Bedier, now vice president of payments at Google, passed on trade secrets to the internet search group.

A Google spokesperson said: "We have not yet received a copy of the complaint and won't be able to comment until we've had a chance to review it."

The lawsuit came just hours after Google announced plans to launch its mobile wallet technology for the Android, allowing people to make shopping payments with their phones, this summer in the US. Near field communications technology (NFC) is already popular in Japan and its use is expected to rapidly spread around the world.

PayPal, the online payment processor owned by eBay, claims that Bedier was in the process of being recruited by Google whilst leading negotiations for a PayPal NFC-Android deal. The deal never came to light, and Bedier was then hired by the search giant in January this year.

PayPal argues that: "By hiring Bedier, with his trade secret knowledge of PayPal's plans and understanding of Google's weaknesses as viewed by the industry leader, Google bought the most comprehensive and sophisticated critique of its own problems available."

"Google put Bedier in charge of its mobile payment business, virtually ensuring the Bedier would misappropriate PayPal's trade secrets concerning planning and competitive assessments in the mobile payment", PayPal's court filing claims.