GOOGLE HAS ANNOUNCED a service which effectively turns your phone into a credit card. Google Wallet allows you to pay for goods using a mobile app on your smartphone, which stores your credit card details along with coupons, loyalty cards and gift cards. The app will be available to customers in the US from this summer and will work with a PIN number.

Google is also hoping that it will be able to develop the technology to allow things like boarding cards, tickets and even keys to be stored on Google Wallet.

However, the last bit of live blogging had barely been done at the Google Wallet press conference in New York yesterday when PayPal welcomed the new app…with a lawsuit. The Guardian reports that the online transaction company is claiming that Google stole ideas for Google Wallet.

PayPal says that the search engine giant stole their golden boy Osama Bedier earlier this year in order to pump him for trade secrets. Bedier is now Google’s vice president of payments. He had been working with Paypal on trying to secure a deal with Google for handling payments on their Android phones.

Secure payments

Google says that security is a “fundamental consideration” when it comes to its latest product. Credit card details stored on a users phone can be disabled if the phone is lost or stolen, and customers will not be liable for rogue usage of their payment details. USA Today reports that testing of the service will begin in New York and San Francisco soon, and the service will only initially be available on the Nexus S smartphone, connecting to MasterCard merchant terminals.

Google Wallet uses a technology called Near Field Payment, which allows a device to send a signal a short distance to another device, in this case a credit card terminal.

More PayPal news: company founder offers overachievers $100,000 to drop out of college, saying education is overrated>