Google Inc., the most-used Internet search engine, will start an online
payment system this month that will challenge EBay Inc.'s PayPal and
let Google offer more targeted ads, an analyst wrote.

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.

``Consumers now view Google as the main starting point for the
Internet,'' Rohan, who rates Google shares ``outperform,'' said today
in an interview. ``That centrality gives Google a huge advantage.''

The product will generate transaction fees for Google and purchase data
may help the company identify which search keywords are most likely to
generate sales and increase the cost of those ads, Rohan said. He said
he learned details of GBuy from merchants who are testing the software.

"We are experimenting in making the whole advertiser buy cycle
faster,'' Schmidt said at the conference in Las Vegas. ``If you get a
stop watch and you time how long these things take, they take way too
long in an online, instantaneous world.''

http://www.chicagotribune.com/technology/chi-060609google-ebay-story,...

hard to see it beating Paypal, but what the heck, man walked on the
moon. and also, it doesnt need to beat paypal, just like yahoo trails
google and is still healthy, google can trail paypal and add some
revenue.

Think outside the box.  There are DOZENS of way that a 'better' paypal
can come along.

Consider for a moment if GBuy were 100% identical to Paypal, but with
this difference:  Interest is paid to YOU at a rate of 4% per annum (or
whatever competitive savings rate).

Consider the possibilites of Online Banks + Paypal Concept.  I'd be
quite certain that Google has considered this, and if not rolled out
immediately, will be a consideration for the longer term.

Google tests Web buying system.

Google would not charge merchants for the service during the beta
phase, but could be expected to take fees of up to 2% after some period
of time, Rohan wrote.

"You have to target the advertisers first," he said, referring to the
need to get a critical mass of merchants on board to make a purchasing
system attractive to consumers.

http://www.usatoday.com/tech/products/services/2006-06-15-google-pay_...

Will GBuy allow creditcards from all over the world?

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.

The expected arrival of GBuy presages a shake-up in the online-payments
market. Until now, consumers have only had payment options such as
PayPal, which lets consumers pay using their credit card or a
bank-account transfer without disclosing their account information to
the merchant or individual receiving the payment. Consumers have also
been able to use online checks and online credit options...

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.

Google's rate doesn't include the discount pricing that the company
will give to merchants participating in its AdWords advertising
program, according to these people. Merchants who spend money on
Google's ad program could get the cost of payment processing through
Google dropped to nothing...

http://online.wsj.com/article/SB115136840690491346.html?mod=yahoo_hs&...