Google's PayPal talks spell end for Checkout
A wide range of billing and payment options is critical to any app store, especially as smartphones spread to new economies and different age groups. While Apple may be studying an iPhone m-wallet, Google is reported to be in talks with eBay's PayPal to bring the well-used internet payment option to Android Market.
As with social networking, this sees Google backing away from offering every key web service under its own brand. A PayPal deal would be a tacit admission of defeat for Google's own alternative, Checkout.
And while most analysts were positive about the idea of bringing PayPal's large user base to Android, many believe the real boost would come from supporting carrier billing consistently across the world.
RIM's offering of PayPal on BlackBerry has hit teething troubles in terms of performance, while carrier billing has repeatedly been proven to be the biggest driver for converting phone purchases.
Nokia has been the most successful to date in creating carrier deals for Ovi Store, building on a long history of operator relationships that Google lacks.
However, offering PayPal instead of, or alongside, Checkout would certainly be a plus for Android Market and another lure to developers to create apps for the store. PayPal has an estimated 87 million registered users as well as incremental support for direct bank account debit or money orders.
Effective integration of the eBay service could enable user advantages like one-click purchasing, bringing the experience closer to that of the Apple App Store. PayPal recently released an Android app that allows users to make payments to other Android or iPhone users.
Critics, however, say PayPal will merely be a stopgap while Google struggles to create carrier billing deals, and that Android represented its best chance to make Checkout a mainstream service on the web.
Rather than enhancing the Checkout experience and making Android its springboard, it seems Google is ceding the war to eBay.