Google Discussing Android Payment Plan with PayPal

Google is in talks with PayPal to offer the e-commerce platform as an option for purchasing applications through the Android Market. This would provide another way for application developers to get paid.

Google is reportedly in talks with PayPal to offer the e-commerce payment platform as an option for purchasing applications through the Android Market.

PayPal, the popular payment service that sports 87 million accounts, would join Google Checkout and credit cards as payment options in the Android Market, which offers applications for smartphones based on Google's Android mobile operating system.

This would make application payment much more attractive to owners of such Android smartphones as the Motorola Droid lineup from Verizon Wireless, as well as the HTC Evo 4G from Sprint and the Google Nexus One gadget.

Bloomberg reported the news Aug. 13, citing three anonymous sources familiar with the negotiations who said the pact could go into effect this year.

Google declined to comment on this report August 15.

That Google would partner with leading e-commerce payment provider PayPal makes complete sense. Google wants to more fully flesh out the Android Market, which is still lacking in many ways compared with Apple's popular iPhone App Store.

Anything that helps Android app developers get paid conveniently would be welcome for Google. Google is currently building a mechanism to allow consumers to purchase applications from the Android Market and charge them to their wireless phone bills.

While Android smartphones outshipped those from RIM's BlackBerry and Apple's iPhone for the second quarter, the Android Market has only 70,000 apps, compared with the roughly 230,000 apps in the App Store.

Jonathan Rosenberg, senior vice president of product management for Google, went on record during Google's second-quarter earnings call saying that Google was looking for a way to improve the billing services in the Android Market.

For PayPal, the discussions come as the eBay property is creating a service to let businesses collect micropayments online, according to the Associated Press.

This would help online gaming and other social software providers that offer virtual currency and virtual goods.