Google's Verizon Problem Is Square, PayPal's Gain

The biggest threat to Jack Dorsey's Square could come from the likes of Google Wallet, according to industry analysts.

But for that threat to materialize, Google and phone vendors will have to get along and that may not be as easy as it sounds.

Take for example Verizon's latest request of the Mountain View-based search company.

The cell phone provider is expected to start carrying the Google Android-powered Samsung Nexus smartphone later this month but before that happens, Verizon wants Google to ditch its wallet.

Verizon is already working with AT&T and T-Mobile on its own mobile payment system, so the company does not want Google to offer an alternative on its devices.

The mobile payment system being designed by the three cellular providers is still in the development phase and is not expected to be tested until next year.

Meanwhile, Google Wallet already is up and running on several Sprint phones, including the Nexus S 4G.

Google has also partered with 100 of retailers across the country to be able to accept mobile payments using Google Wallet. A list that includes the likes of Emeryville-based Jamba Juice.

Square for its part is defying industry logic and processing more than $2 billion in transactions. But the company, along with Google, are still chasing the mobile payment leader PayPal, who is projected to process $3.5 billion in mobile payments this year.

That is a jump from the $750 million that went through its system last year.
 
The San Francisco-based startup has been able to avoid some of the pitfalls that the likes of Google is dealing with right now by eliminating the middleman in a sense.

While Square's processing app has to get approval from both the Apple App Store and the Android Market, the company doesn't have to ask for permission to give out its free credit card processor attachment to whoever wants it.

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