Google To Challenge PayPal With GBuy
Last March, Google created the Google Payment Corporation. It is now being reported that Google has spent the past nine months recruiting online retailers to test a payment system named GBuy. Users will see the GBuy icon next to AdWords paid search ads.
Online payments have been domineered by eBay’s PayPal for what seems like ages, but Google’s lurking actions seem to indicate that PayPal’s reign might not be so absolute any longer.
Jeff Jordan, the president of eBay’s PayPal unit, said that “It’s a very legitimate competitive threat. It’s hard not to pay attention to what Google is doing.”
Google Chief Executive Erich Schmidt has said in press accounts that Google was constructing an online payment service, but that it would not directly compete with PayPal, which Schmidt described as a “person-to-person, stored-value payments system.”
However, after he and his team “dissected the wording” of Google’s statements, Jordan has decided not to believe them.
PayPal currently has 24% of the online payments market, which accounts for 23% of eBay’s most recent $1.3 billion quarterly revenue. The potential to bite into this hefty revenue surely has Google licking their chops.
The GBuy icons next to the paid-search ads of merchants are there to tempt users to click on the ads. GBuy will also allow consumers to share and store their credit card information with Google, which is a key feature of PayPal.
Jordan has been preparing for a potential fight with Google. He and his team have been running through competitive scenarios to evaluate possible risks they might face if Google entered the market. They run these scenarios with other rivals as well.
If Google does run GBuy in contention with PayPal, one point of interest will be whether eBay accepts GBuy as a payment method.
The Gbuy.com domain is not functional, which suggests that Google has not yet made its online payment service readily available just yet. The domain name is registered to Trout & Zimmer, a firm located in Burbank, California.
Sources:
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