Last June, rumors of a future Google payment service first surfaced under the name "Google Wallet." Now, a year later, it has been dubbed "GBuy" by the media and is expected to launch later this month.
Although not yet formally named by Google, the online payment system has been tested through Google Base. While Google itself has been mum on the new service, in a recent research note, RBC Capital Markets analyst Jordan Rohan suggested that GBuy would launch June 28 as a free beta preview.
Rather than handle consumer-to-consumer transactions, it is believed that at the very least, Googles offering will provide a direct payment option for those using Googles advertising programs and online services (such as AdWords, Google Shop and Google Base).
Offering a payment service to its present customer base seems to makes sense for Google. For example, those earning payouts from AdWords, could theoretically choose to accept their payments through Googles service which, of course, would make it easier to funnel those funds directly back into AdWords to advertise their own Web site and services. Still, the capability to pay funds directly to Google through a Google payment has its appeal to those using paid Google services.
Analysts in a recent Forbes story on GBuy said they expect Google to charge 1.5 percent to 2 percent. Those fees fall slightly below the fees currently charged by PayPal for transactions, but with this service in use for services such as AdWords or Google Shop, Google, would, in essence, be earning transaction fees on what is already Google-generated revenue.
In addition to the lower initial start fees, the Forbes story also reported that merchants invited to test the beta can also expect to have some sort of a trusted merchant logo placed within their Google search results. Those using the Google service to complete a transaction will leave the merchant Web site and complete payment through Google.
While many question if this service is a direct competitor to PayPal, according to Reuters, Google CEO Eric Schmidt confirmed testing of a payment service, but denied it would compete with PayPal.
|Google Video currently offers a way to purchase videos with a credit card, but in the future you may see the option to use a Google payment service on it and other Google Services such as AdWords and Google Earth.|
Taking PayPal on is no small feat, as it currently handles a large percentage of eBay transactions, and with its recently announced Developer Hub and Community (story) initiatives it is already working to gain a larger share of the $165 billion "off-eBay" payment processing dollars.
Industry watchers are not ruling out the possibility that Googles offering can easily enter the consumer transaction market and compete with PayPal, once the branding has been accepted as a trusted service something that could transpire quickly if and when organic Google search results begin to show a trusted Google merchant or Google payment logo placed within those searches. Google currently holds a 59 percent share of the U.S. Web searches (according to Hitwise, a data analysis firm) and as such, has the opportunity to promote its payment service to a vast number of Internet users.
Google remained tight-lipped about the payment service when contacted by ECommerce-Guide.com, saying there was nothing specific to announce, and commented that billing and payments have historically been a part of Google's advertising programs and online services. "As previously announced, we offer users the ability to buy items on Google Base and at the Google Store as well as pay for services like Google AdWords, Google Video and Google Earth."
Google has not denied statements that the service is planned for a beta preview release later this month.
Internetnews.com's Ed Sutherland contributed to this report.
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