On Thursday, two Google executives were the central focus of the company’s new Google Wallet initiative -- and are now at the center of a PayPal lawsuit over breaching contracts and misappropriating trade secrets from their former employer.

AllThingsD is reporting that PayPal has filed suit against Google and two former executives now in charge of the search giant’s Google Wallet service, right on the heels of the company’s announcement on Thursday in New York -- though the lawsuit had already been in the works, so the timing is purely coincidental.

At the center of the e-commerce storm is Google VP of commerce Stephanie Tilenius and VP of payments Osama Bedier, who jointly introduced Google Wallet to the world this week. Both executives had been working on similar technology during their tenures at PayPal, where Tilenius left in late 2009 after nine years, followed by Bedier earlier this year after an eight year stretch.

PayPal claims that Tilenius recruited Bedier, a violation of her contract, while Bedier’s position as VP of platform, mobile and new ventures gave him a clear view of “PayPal’s capabilities, strategies, plans and market intelligence regarding mobile payment and related technologies.”

Perhaps more damning for Bedier is the fact that PayPal was apparently negotiating a deal with Google from 2008 to 2011 to be a key payment option for mobile purchases on the Android Market -- negotiations that Bedier was heading up at the same time he was “also interviewing for a job at Google,” according to PayPal’s claims.

PayPal’s suit was filed Thursday morning in Santa Clara Superior Court against both Google and the two executives, claiming “the company and employees misappropriated trade secrets and violated contracts involving recruiting agreements.” Time will tell if Google may have to get out its Nexus S and open its own digital Wallet to settle this mess with PayPal.

Follow this article’s author, J.R. Bookwalter on Twitter