PayPal will be a payment option at the Android Market: Google yields to eBay

The latest rumors in the media sources suggest that PayPal will be offered as a payment option for users of Android phones who purchase something at the Android Market. Google is about to reach an agreement with eBay, as reported by Scott Moritz of TheStreet.com.

Google and eBay have been direct rivals in payment industry for a long time. The search giant always tried to downplay the role of PayPal and instead to promote its own payment product Google Checkout.

Moritz reported: "Google has finally enlisted eBay's PayPal service and is preparing to launch the payment system on its Android Market later this month. Sources familiar with the situation say the deal is all but sealed, with an announcement coming as early as Oct. 26 during the PayPal developers' conference in San Francisco."

He further says: “The deal with Google is also huge for PayPal. Eager to get better footing in mobile payments, the placement on Google's Android Market puts PayPal onboard one of the world's fastest growing mobile systems. PayPal has an iPhone app for Apple, but as far as iTunes, PayPal is listed a payment option but it requires a PayPal credit card.”

At the moment the main issue at the focus on the talks is “economics”. Google and PayPal cannot still come to a unanimous decision about the revenue distribution.