Google announced yesterday their new mobile payments offering, Google Wallet.

Basically it is a mobile phone payments system for Android mobiles, which has been launched in conjunction with Citi, MasterCard, FirstData and Sprint.

The advantages for the end user are obvious – carry less cash, simply swipe your phone and save time. For businesses, they can operate loyalty programs and gain the data directly from Google Wallet – great news for smaller companies who can’t afford the infrastructure they would require to do this.

Some of the companies that will accept Google Wallet include Subway, Toys R Us and Foot Locker.

Because of the way it works it means offline businesses will be able to track the results of their online marketing – again allowing Google to push up ad revenue in these areas, as tracking offline results has been one of the most difficult things to do when using AdWords.

PayPal didn’t like this though, they’ve decided to sue claiming that Google have obtained trade secrets from Osama Bedier who used to work for PayPal (Osama moved to Google to head up payments). It appears Osama was attracted to Google when he was working with them on a payments system for PayPal on Android, so he no doubt has a lot of inside knowledge of the company.

I think, to be honest, they probably have a case – but then, I’m no lawyer.

Anyways, Google Wallet looks like it will be very interesting and will open a whole new world of analytics for me