PayPal, which is owned by eBay, is accusing Google of obtaining trade secrets from Osama Bedier, a former PayPal exec who now holds the position of Google vice president of payments.
The lawsuit was launched hours after the unveiling of the ’Google Wallet’ at a press conference in New York.
Google Wallet is being launched in conjunction with Google Offers, which are built on an open platform and designed to combine payments and offers at the point of sale.
The internet giant is using a “your phone will be your wallet” strapline for the new technology.
Citi, MasterCard, FirstData and Sprint are partnering with Google in order to make the technology viable.
Google has formed a new marketing department to promote the new contactless payment technology.