Google is reported to be in talks with Paypal about integrating the eBay-owned payment service with the search giant's Android smartphone software.
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Google is expected to incorporate Paypal into Android to make Android phone applications easier to purchase, according to a report by Bloomberg.
Current payment options on Android phones include Google's Checkout service or credit card payments. The link-up with Paypal could potentially boost Android's position in the app market. Adding Paypal would provide an alternative means of payment for app developers making them more likely to develop Android apps, said Bloomberg.
Android-based handsets and the operating system (OS) have recently experienced a surge in sales and popularity. Android sales grew 886% from shipments of phones from HTC, Motorola, Samsung, Sony Ericsson and LG, among others.
The Android smartphone OS also overtook Apple's iOS to become the third most popular smartphone OS globally behind Research in Motion / Blackberry (18%) and Symbian (41%). In the US, Android became the top smartphone OS. A link-up between Google and Paypal could continue Android's success, challenging Apple's stronghold on the apps market.
Paypal and Google both declined to comment on industry speculation.