PayPal is reported to be in talks with Google to embed its payments platform in the Android operating system. Bloomberg first broke the news late Friday, although neither party has commented on the unconfirmed talks. It is believed that users of Android phones such as Motorola’s Droid X and HTC’s Droid Incredible may be able to pay for apps with PayPal as soon as this year. Customers currently pay via credit card and Google’s Checkout service.
The move would be a huge boost to both Android Market and PayPal. PayPal has 87 million active accounts, giving Google’s Android Market potential access to many more paying customers. By adding PayPal, Google would also give app developers another way to get paid, potentially making them more likely to create software for Android (Android has around 70,000 apps compared to Apple’s 225,000). For PayPal, a deal with Google would go some way to helping it achieve the ambitious financial goals set by Ebay, which owns the online payments business. Last year John Donahoe, chief executive of Ebay, said PayPal revenue would nearly double from 2008 to 2011 (putting PayPal’s revenue at US$4-5 billion next year). It’s worth noting that PayPal is already available for accepting and making mobile payments on the iPhone and Android platforms. Bloomberg’s report suggests PayPal would be more closely integrated within Android, similar to how the iTunes Store works on Apple’s iOS devices.