Google just announced it is entering the mobile payment market and PayPal responded with a lawsuit alleging Google misappropriated its trade secrets through hiring its former employee.
http://www.cellular-news.com/story/49343.php
http://www.cellular-news.com/story/49351.php
I just blogged my idea that eBay should spend the proceeds from selling Skype's stake on mobile payment solution for its PayPal division. I believe money and brand name are very important for this emerging product. PayPal's suing Google seems to indicate that PayPal thinks the same way. There are a lot of mobile payment start-ups. I just did a quick search, and within 5 minutes, I got company names like Square, Corduro, Boku, Billing Revolution, Mobillcash, and Zong. But PayPal did not go after any one of them. Instead, PayPal cared about what Google is doing so much that it went to court to prove a point.
There is a quote in Bloomberg's report on this lawsuit:
“Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy,” Aaron Zamost, a Google spokesman. In a way, the series of events is a norm in the Valley between companies, employers and employees. I hope this lawsuit is a PR stunt by PayPal. Tomorrow, it can be Yahoo, Facebook, or Microsoft buying a mobile payment company to compete with everyone else. PayPal has so far enjoyed a perception of providing credit card/banking services without being regulated as a bank in the US. The benefit to its users, individuals and merchants, is that the money stays in PayPal's domain to lower cost. Otherwise, it is like a money transmitter business which has other costs associated with its products when the money has to go in and out. A segmented market will not provide such cost benefits and PayPal probably understands that.
http://www.cellular-news.com/story/49343.php
http://www.cellular-news.com/story/49351.php
I just blogged my idea that eBay should spend the proceeds from selling Skype's stake on mobile payment solution for its PayPal division. I believe money and brand name are very important for this emerging product. PayPal's suing Google seems to indicate that PayPal thinks the same way. There are a lot of mobile payment start-ups. I just did a quick search, and within 5 minutes, I got company names like Square, Corduro, Boku, Billing Revolution, Mobillcash, and Zong. But PayPal did not go after any one of them. Instead, PayPal cared about what Google is doing so much that it went to court to prove a point.
There is a quote in Bloomberg's report on this lawsuit:
“Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy,” Aaron Zamost, a Google spokesman. In a way, the series of events is a norm in the Valley between companies, employers and employees. I hope this lawsuit is a PR stunt by PayPal. Tomorrow, it can be Yahoo, Facebook, or Microsoft buying a mobile payment company to compete with everyone else. PayPal has so far enjoyed a perception of providing credit card/banking services without being regulated as a bank in the US. The benefit to its users, individuals and merchants, is that the money stays in PayPal's domain to lower cost. Otherwise, it is like a money transmitter business which has other costs associated with its products when the money has to go in and out. A segmented market will not provide such cost benefits and PayPal probably understands that.
