Not everyone is happy with PayPal on Android and iPhone

Over the weekend, PayPal revealed that it would be powering application purchases on Android and iPhone. For the iPhone, PayPal has come up with a way to enable “in-app” through its systems. But the news for Android is significantly bigger. PayPal will become the first alternative to Google Checkout for buying apps over the Market – and not everyone is delighted with the news.

The iPhone announcement from PayPal is for a method to pay for actual physical goods that you have ordered over the iPhone. The PayPal Benelux Country Manager Dennis van Allermeersch has been widely reported as saying “we have found a way, Apple is OK with it”. But the Android announcement has more of an impact.

Why?

Up until now, if you wanted to buy an app over the Android Market, you had to have a Google Checkout account. There have been some carrier options launched in the past, where a user could add the cost of an app to their monthly bill rather than use Checkout. But these are specific to certain networks, and certainly don’t apply across the whole range of Android owners in the world. Other reported problems include how difficult it is to get Google to reactivate your account if there have been any problems, and the dependence of Google Checkout on credit cards – especially in countries where credit cards aren’t as prevalent as the US (see this complaint from a German Android owner). A final criticism is that this forces Android users to be Google dependent in order to access the full functions of the OS. As an “open” OS, technically you shouldn’t have to have a Google account to use Android – but making Checkout the only reliably available payment method for Market forces Android users to also be Google users.

So it would seem that finally offering PayPal is a great solution. It enables a second payment channel, just in case there’s a Google Checkout problem. Redundancy systems are rarely a bad idea. It also gives purchasing power to people without a credit card.

But along with the people welcoming this announcement, there has been a chorus of voices who aren’t as pleased.

What’s the problem?

PayPal is the problem, essentially. While many people feel quite strongly that PayPal is the only eCommerce channel they feel comfortable with, there are a large number who think that PayPal is pretty much the Devil – and are happy to stick with Checkout. For some vitriolic anti-PayPal information, you can check out Screw PayPal, About PayPal, and PayPal Sucks.

What we think?

Rob Jackson over on Phandroid made an excellent point last month, when he said that PayPal is actually only really for technophiles. The vast majority of people don’t have PayPal access at all. People who buy applications through the Android Market are a subsection of a subsection of a group of gadgets lovers. Perhaps as the channel expands to become truly mass market, better payment options will be available. Sure, neither PayPal nor Google Checkout are perfect, but if you want to buy apps on Market you have to have someone who will transfer that payment for you. And having some options is better than having none.