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Summary:

Users of Google Android phones may soon be able to use PayPal to purchase mobile applications, making it easier to add software to Android handsets. Would such a purchase mechanism be solely limited to Android software or might we see Google start hawking music and books?

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Users of Google Android phones may soon be able to purchase mobile applications using PayPal, making it easier and quicker to add software to Android handsets. A deal between Google and PayPal is expected to be announced at the PayPal Developers Conference in San Francisco later this month, says Scott Moritz at TheStreet. If Google does add PayPal integration to the Android Market, such a move would address one of main shortcomings of Google’s app store, making it almost as easy to use as Apple’s.

Software purchases in the Android Market currently use Google Checkout, which I’ve personally found flaky on my Nexus One handset. In contrast, I’ve never had an issue with mobile transactions through Apple, nor with Amazon or PayPal, for that matter. Google may excel in many areas of the web, but the payment mechanism for mobile apps hasn’t been one of them. Adding PayPal integration will remove that deficiency and could help spur Android software sales, which in turn might offer more hope for Android developers who are betting that a positive Google future in the handset space will lead programmers to more profits.

PayPal integration would be a huge step forward for Google’s Android Market, but there’s still work to be done. Though finding apps is a chore (which is ironic, considering Google’s expertise in search technologies), this, along with installing apps, is slated to improve. At its developer conference earlier this year, Google showed off a web implementation of the Android Market. With it, users can find apps and with the click of a button, have the software wirelessly sent to an Android phone.

Even with such improvements, another Android Market issue continues to exist: Software is only offered in a very limited number of countries. Just last week, Google nearly doubled the number of markets that support paid applications on Android phones, but there are still many regions where Android handset owners are unable to take full advantage of the Market. Those folks may be waiting a bit yet, but if PayPal integration is added to Google’s mobile software store, they’ll be able to buy apps as quickly as they can tap the screen, once their region offers paid apps.

Although the Android Market is the obvious beneficiary of a PayPal partnership, I’m wondering if there’s more to this potential development than software. Whispers of Google selling content such as music and books have been making the rounds for months. Perhaps the Android Market is about to expand to a full-service store with PayPal checkouts. In addition to the software aisle, will there be virtual shelves for other digital content later this month?

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  1. kevin, why is no one talking about this? all we hear about is “android’s explosive growth” and proof points like mobile OS growth and 70,000 apps in the store. are developers actually making money? is their store easy to use and good for both customers and developers? is the quality of applications really on par with apple or anyone else?

    google wallet is a horrible idea for a payment mechanism. they might as well ask their customers to exchange fur pelts with developers. no wonder no developers are actually making profit — customers can’t hand over their money because google uses a dead-in-the-water payment instrument. paypal is better, but not best. paypal accounts might be widespread amongst android’s ‘techy audience’ but it is by no means widespread and certainly can’t offer the global reach and convenience of something like operator billing. (also, i love that the market shows apps priced in all sorts of currencies, like euros, dollars, and pound…ridiculous and very sub-par for any e-commerce site).

    browsing android market is an atrocious experience. search doesn’t work, and if you search on google.com you can’t link into the store…a nice dead-end for users.

    and where’s the developer profitability?

    google doesn’t mind though…they are probably more surprised than anyone about android’s success and only now starting to address these issues. but look, this is an extension of their web strategy. all they care about is that their developers buy adwords and adsense ads to drive traffic to their app.

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  2. [...] This lack of current content and limitation to a single company’s properties, underscore the need for a better answer for paid video on Android devices. There’s an Amazon MP3 app for music downloads, as well streaming radio stations like Pandora and Slacker. Google is also reportedly working on its own music store that might work with rumored PayPal integration in Android Market. [...]

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  3. Any news on Google Editions? I haven’t heard anything about it in months. I was hoping it will come integrated with Gingerbread.

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  4. So much FUD about Google Checkout. As far as I’m concerned, it’s only problem is that it’s not available in enough countries, and Google is working to address that.

    I have never found it at all “flaky” on my Nexus One or on the Web (when I bought my Nexus One). In my experience, it’s rock solid and dead-simple. It took way less effort to configure than PayPal. For whatever reason (maybe because I’m in Canada?), PayPal insists on drawing from my bank account, even though I’d rather earn points by using my credit card. It also does it’s own currency exchange, at a less favourable rate than my bank or credit card company. Plus, PayPal requires another sign on, while Checkout simply uses my Google account, which I’m always signed into on my phone, anyway.

    In short, I will never use PayPal on my Android phone. Google Checkout is by far the superior service.

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  5. Mysterious developer Wednesday, October 6, 2010

    What Would Adding PayPal Mean to the Android Market?

    If you’re a developer, it’s simple: every refund of a 1 dollar app would lead to paypal freezing your account for 6 months.

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    1. I’m so glad someone mentioned this. Paypal is great for users, its ubiqious, fast, easy, safe, etc. It cares about users so much that when users are, mmm…, dishonest, and think that a trial version lasts as much as they want and when they want it over because the new app has just become available, they want a refund. Or they haven’t read the TOS. Or they changed their mind. That would be no problem with other systems but as paypal is so safe for users, he would simply block the unsafe developer for other smart client not to be trapped. With their monitoring multiple accounts of the same merchant, this can become a problem.
      But I’m not an app developer so I’m glad:)

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  6. Paypal’s handling of disputes leaves something to be desired. That’s for sure.

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  7. Draft Media Release re PayPal

    “It is with great sadness that eBay’s Chief Headless Turkey, John Donahoe, announces the probable demise of eBay’s most ugly daughter, PayPal. Donahoe says that PayPal has been stricken by particularly virulent strains of Visa+CyberSource and Mastercard Open Platform, and these afflictions are greatly aggravated by PayPal’s insurmountable lack of direct financial institutions support and a great deal of PayPal user dissatisfaction, particularly with respect to PayPal’s grossly unfair, “all responsibility avoiding” user agreement, totally primitive risk management processes, and grossly unprofessional, usually buyer-biased, fraud-facilitating (indeed, non existent) transactions mediation, to name just a few of the problems that PayPal merchants have to endure.

    “Donahoe says that PayPal’s health may therefore be expected to deteriorate and, if ultimately not completely incapacitated, will most likely be eventually confined to its mandatory offering on what little there will be, by then, left of the Donahoe-devastated eBay marketplaces. There is no cure for this condition, and the “eBafia Don” is particularly saddened by the inevitable presumption that it is unlikely that PayPal, will be able to continue to underpin eBay’s sagging bottom line too far into the future.”

    Yes, it’s a send-up but, still, it accurately describes PayPal’s most unprofessional and “clunky” operation. The fact is, had the developers of the original “bankcard” concept ever behaved the way PayPal behaves towards its payees in particular, credit/debit cards may never have gotten off the ground, and we would probably still be paying for all our purchases with bits of paper and little metal discs.

    It should also be emphasized that all the payments processors that do not have the direct underlying support of the financial institutions, as do Visa/Mastercard, suffer the same handicaps that PayPal does. The “banks” may be disliked by some but they at least supply a “professional” payments processing service.

    A detailed examination of and prognosis for PayPal, (including a link to the “PayPal Horror Tour”) at:
    http://forums.auctionbytes.com/vbulletin/showthread.php?t=23309

    Shill Bidding on eBay: Case Study #4
    This latest study provides an indication of eBay’s desperation to mitigate lessening sales activity and very effectively demonstrates eBay’s effective aiding and abetting of criminal shill bidding “wire fraud” activity by unscrupulous professional sellers on unsuspecting buyers:
    http://forums.auctionbytes.com/vbulletin/showthread.php?t=23540

    eBay/PayPal/Donahoe: Dead Men Walking.

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  8. I thought Google was going to adopt PayPal in order to accept Android market payments in international markets? If so, why did Google expand Google Checkout in the Android Market to numerous new international markets last week? Why do they need PayPal now?

    Judging by the timing of the Google Checkout rollout, it seems like PayPal will be an embedded payment option within Google Checkout and not a replacement.

    The dark horse here is Digital River, which powers the payment platform for the Blackberry App store and has a large international payment platform. See here: http://goo.gl/HM0p

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  9. Today when see the market survey then you found that is the Android is Long run way. So it very good news for the customer that they don’t want to go any apps store for purchasing apps they can easily purchase through pay pal services on their android phones

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  10. [...] sales of Angry Birds do. But until the Android Market has wide distribution in more countries and a better checkout system, free apps are the way to go for many Android [...]

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