Google Checkout moves into the PayPal market

Google have now launched their new Google Checkout service in the UK in a move which is set to rival the industry leader in single online payments - PayPal.

The view that eBay (who own PayPal) sees Google as moving into their territory is confirmed by the fact that eBay has banned all its users from offering Google Checkout as a payment option for their auction items. If a user is found to have breached these terms they could then be faced with the termination of their eBay account. This policy has been defended by eBay -stating that all new payment methods are assessed for their suitability with the marketplace and

"The online marketplace is understood to believe that Google Checkout lacks a track record as a reliable and secure payment mechanism"

Google however still has a long way to go to catch up with PayPal's dominance in online payments even if eBay transactions are taken out of the figures - with PayPal commanding 8% - 9% against 2% on end-to-end online payments (where payment details are stored centrally) in the US.

Google aim to generate revenue through the processing of payments but are offering free processing to their users until 2008. They will then offer discounts to users who also sign up to their Google AdWords service so for every £1 you spend on AdWords, you can process £10 in sales for free through Google Checkout.

Google also aim to target PayPal's known abuse by fraudsters by offering high levels of protection against fraud and helping any victims - buyers or retailers - to reclaim their lost money.

So while you won't see Google Checkout appearing on eBay anytime soon, be sure to look out for the new payment option on other websites as it will likely be quickly adopted and widely used alongside PayPal.