The word on the street these days is that Google is developing an online-payment system to rival PayPal's. People familiar with the matter leaked the news to The Wall Street Journal late Friday, offering few details beyond the most obvious. And in the pages of today's New York Times, an online retailer claims to have been been approached by the search giant to take part in just such an effort. Lending heft to both reports is the new business Google filed to incorporate, not two months ago: Google Payment Corporation.
If you are not familiar with PayPal, it is a company that offers credit card transactions to other companies that have web sites. I use them on my web site as it saves me the expense of having to buy a separate secure web server just to take credit cards and it provides me with all the codes I need to incorporate into my web pages for both a shopping cart and secure checkout services.
For instance, if you want to buy one of my paintings from my web site, you select the painting you want and it is put into a "shopping cart." You can then check out through a secure PayPal web site page using any credit card you want. I am then notified and after I ship the painting to you, I then transfer the funds from PayPal directly into my bank account, minus a small transaction fee.
Some time ago, PayPal was bought out by eBay and has greatly diversified its capabilities. They basically now have a monopoly in the field that Google is trying to break into.
With a full 99 percent of its revenues tied to online advertising, Google is a company in obvious need of diversification. Offering an innovative way for people to transact money online would be an easy way for it to achieve that. Certainly it could potentially be integrated into Google's core advertising program and, beyond that, be extended to target the broader online merchant opportunity.
This could get interesting.
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