Now that Google has backed off from offering its own payments service, it is making amends with eBay and PayPal. In a surprise announcement, Google announced to developers on Thursday that it was offering PayPal as a payment method on its Google Play app store.
A year ago Google announced it was abandoning its payment processing service called Google Checkout, but continued to offer Google Wallet – which is not a payments processor, but rather, a way to store payment methods such as credit cards on mobile devices and use them for mobile transactions.
Some might see the move as a sign of reconciliation between Google and eBay, which in 2007 sparred over what eBay perceived as Google poaching eBay users at its eBay Live conference and caused a major rift between the two companies. But eBay’s acquisition of Braintree Payments late last year made it more difficult for Google, which had partnered with Braintree after shuttering its own Checkout service.
Offering PayPal also helps Google expand international sales. Two-thirds of Google Play purchases happen outside of the United States, according to Google Play Product Manager Ibrahim Elbouchikhi, with international sales continuing to climb. “We’re hoping to fuel this momentum by making Google Play payments easier and more convenient for people around the world.”
In the announcement, Elbouchikhi further explained: “Starting today, we’re making it possible for people to choose PayPal for their Google Play purchases in 12 countries, including the U.S., Germany, and Canada. When you make a purchase on Google Play in these countries, you’ll find PayPal as an option in your Google Wallet; just enter your PayPal account login and you’ll easily be able to make purchases.”
Referring to the PayPal integration, Elbouchikhi said, “Our goal is to provide users with a frictionless payment experience, and this new integration is another example of how we work with partners from across the payments industry to deliver this to the user.”
Wall Street analyst Mark May of Citi said Google Play’s addition of PayPal in 12 countries was a “positive, though incremental, development” for two main reasons:
1) It suggests that PayPal continues to make strides in closing the gap in what we believe has been lower share of off-eBay business on mobile devices;
2) The revenue potential from this deal alone could be meaningful.
May estimated that gross booking on the Google Play store would be $7.3 billion this year and $10.6 billion in 2015.
PayPal can be used to buy apps and digital content on Google Play in the following countries: Austria, Belgium, Canada, Finland, France, Germany, Ireland, Italy, Netherlands, Spain, United States, United Kingdom. PayPal can’t be used to purchase devices or accessories on Google Play or for other purchases that use Google Wallet outside of the Play Store.
Consumers who want to learn how to add PayPal to their Google Wallet to buy apps and digital content on Google Play can learn more on this Google help page.
Interestingly this week we reported on recent speculation (or perhaps wishful thinking) that Google should conside acquiring eBay.