Google faces an immediate legal challenge to its mobile wallet plans, with PayPal suing the firm for misappropriating its trade secrets just hours after the search firm unveiled its NFC service.
PayPal claims former staffers Osama Bedier and Stephanie Tilenius leaked details of a mobile payment scheme PayPal is developing to their new employer, leaving it with no choice but to take legal action.
“Spending time in courtrooms is generally not our thing…But sometimes the behaviors of people and competitors make legal action the only meaningful way for a company to protect one of its most valuable assets – its trade secrets,” senior global communications director Amanda Pires explains adding. “We treat PayPal’s “secrets” seriously, and take it personally when someone else doesn’t.
PayPal claims Bedier, who was leading development of its mobile payment platform, leaked details of its future strategy when he took up a similar role at Google in January. It says Tilenius broke her contract with eBay by encouraging Google to hire Bedier, and notes the latter was being interviewed for the job while negotiations to make PayPal a payment option on Google’s Android Market were taking place.
Although the firm names Bedier and Tilenius in its filing, it said up to fifty more names could be added “when their true involvement in these matters and capacities are ascertained.”
The lawsuit was filed the same day that Google took the wraps off its long-awaited mobile wallet service and named its first partners in the venture.
The company has teamed with wireless operator Sprint, financial services firm Citi, payment company MasterCard and transaction company First Data for live trials of Google Wallet, which can be accessed only on Sprint’s NFC-enabled Nexus S 4G smartphone.
Field tests are due to begin in New York and San Francisco in the summer. While Google declined to say how many merchants have signed up to the pilot, the commercial service will offer access to 124,000 retailers in North America that already accept PayPass – MasterCard’s contactless card payment scheme.
Google also outlined plans to develop Single Tap, a new point of sale system, in conjunction with firms including VeriFone, Hypercom, Ingenico and VIVOTech. The firm has also tested promotions ranging from discounts on items discovered through its search adds, to coupons received when entering a store.