Google GBUY

The Wall Street Journal confirmed today, that Google's entry into the online payments arena. Called Google GBuy, the new service allows consumers to make online transactions without a credit card. The announcement has been expected for months. Online payments competitor, PayPal, has launched PayPal Mobile, and is planning other new initiatives in an effort to deter Google's entry into the lucrative space. Paypal has over 100 million account holders. Unlike PayPal, however, Google GBuy will be closely tied to their keyword advertising business. Excerpt from the WSJ:

"Here is how the service will work: Consumers who search for items like "shoes" or "strollers" on Google’s search site will see text ads with a symbol or icon designating advertisers that accept GBuy payments. Shoppers normally would have clicked on an ad and been linked to that merchant’s Web site. Now, while they will still be linked to the merchant’s site, they will go through a different checkout process integrated with Google if they choose GBuy for their transaction. Details of the service could still change before Google’s official GBuy announcement…Google plans to charge merchants a 2.2% commission on a sale, plus 30 cents per transaction using its payment service, according to people briefed on Google’s pricing. That is higher than Pay-Pal’s lowest published rate of a 1.9% commission plus 30 cents per transaction."

GBuy, which will begin on June 28, will handle purchases between shoppers and merchants, RBC Capital Markets analyst Jordan Rohan wrote today in a note to investors. Participating sellers will be listed as ``trusted GBuy merchant'' in Google search results, he said. Chief Executive Officer Eric Schmidt has confirmed that Mountain View, California-based Google is working on a payment system to make it easier for users to buy products online. The move counters an initiative by EBay, the world's largest Internet auctioneer, which last month formed an alliance with Yahoo! Inc. for Internet advertising and online payments... more

google | gbuy