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...

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