Slashdot Mirror
Google Wallet May Compete With Paypal
theskeptic writes "According to the WSJ, Google plans to offer an electronic-payment service that could help the Internet-search company diversify its revenue and may heighten competition with eBay's PayPal unit. Codenamed Google Wallet, a payment service could represent a significant expansion beyond online advertising, which generated 99% of its $3.2 billion in revenue last year. Google's move could potentially threaten eBay's successful PayPal service, which generated $233.1 million, or 23% of eBay's revenue in the first quarter."
I had an eBayer complain about a transaction and PayPal did not just set aside the amount of the sale which was small - they locked out my entire account which had a ripple affect with other auctions I was running. By the time I was exonerated I had taken a beating. I am not opposed to competition if it might reduce some of this heavy handed behavior.
http://www.busyweather.com/
If Google's going this way, it might be just as easy to tie it into the Froogle service: let people find the item they want, then pay for it from the same interface.
In time, they could introduce their own eBay like system. Odds are, eBay won't just let Google Wallet into their system and people would have to do payments manually (they way they used to with Paypal). But if Google builds off of Froogle and inserts themselves as a middleman, it would be an effective way of getting extra revenue and balancing out their ad system.
Just a random thought - naturally, I could be wrong.
52 Weeks, 52 Religions with John Hummel
I *really* hope they go through with that. So far, PayPal has what is pretty much a monopoly on online payments; there's alternatives like Moneybookers, but few people even know about them, and PayPal has consistently and systematically abused its monopoly by imposing more and more unreasonable restrictions.
Two that annoy me the most, personally are the fact that you can't use it for "adult" transactions, and that it's quite limited with regard to how you can get your own money that sits in your own account in many countries outside of the USA. In fact, there is a list of countries where the only available option is transferring the money to a US-based bank account - which really is ridiculous when you think about it. It may not matter much to the average US citizen, of course, but think about it - what would you say if you found out that the online payment service you used to have people pay for the stuff you sold on eBay only allows you to transfer the money to a bank account in - say - Uruguay?
PayPal's policies are consistent with those of eBay, though (its mother company nowadays); like eBay, PayPal is entirely inconsiderate of its users, a stark contrast to Google's "do no evil" philosophy.
Let's hope that Google will revolutionize online payments the same way they revolutionized searching, and let's also hope that PayPal will soon be just as forgotten as Hotbot, Northernlight, Mamma and all the search engines we used before Google was there.
quidquid latine dictum sit altum videtur.
Getting into payment systems will expose Google to new levels of regulation that may affect user's privacy. Regulations related money laundering and anti-terrorist laws may force Google to collect and turn-over data on users of its payment service. I wonder if those rules might also force Google to turn-over other data on "customers of interest".
Having all your information (your banking, your email, your internet search activities) in one basket makes it a tempting target for government.
Two wrongs don't make a right, but three lefts do.
Id say one of the significant reasons for Google doing this is for payments to and from adsense publishers and adwords advertisers.
Currently they just send cheques in the post every month to publishers, which is crazy for overseas publishers and must increase their costs a fair bit. They don't use services such as Paypal due to the fees.
It would also help in obtaining money from advertisers for adwords.
Google deals with a lot of (sometimes small individual units of) money from publishers and advertisers, and their current system would be far better off if it were handled online through themselves.
I.O.U One Sig.
Google basically made it's own micropayment transaction system internally to handle the accounting of google adwords and adsense revenue changing hands in millions of transactions every day.
They just needed to take the next logical step with it.
e.
Build Your Own PVR/HTPC news, reviews, &
Google could do very well in this situation to the benefit of all. The greed of the banks is probably preventing them from making a lot more money by charging less on what would be a lot more transactions.
I agree about the competition, but I would have hoped for a competitor that wasn't based in the same country. This means that both options are still subject to the whims of one country and its political and economic prticulars.
Trust the Computer. The Computer is your friend.
www.gwallet.com is currently owned by a domain squatter
wallet.google.com would allow them to re-use the cookie set by the google.com domain
I'm posting anonymously not so much because I'm a coward as because I can't lose my job just yet, but I'm "one who should know" and I can say that being in the money-issuing business and doing no evil are VERY hard. Issuing money is not like being a search engine or giving-away a free, ad-supported email service or whatever -- it's a function governments have traditionally reserved for themselves because (especially when you break your word on backing it with for example, a certain yellowish heavy metal) it's hyperlucrative to issue money if people can be made to THINK it's valuable (intrinsic/actual value means little these days).
t
Want a not-so-real real-world example? Look at Everquest -- Sony has struggled AGAINST a market in that totally-virtual form of loot for the better part of a decade before finally giving up and letting a market openly-happen, and at this point the Everquest Economy is said to be bigger than a number of African nations, put together! I believe it...
But the moral hazards of issuing money (and the attendant privacy-concerns) IMO will DWARF the past no-evils Google has confronted, so they'll need to tread very lightly -- as this is also a way to piss-off their bankers...
someoneintheindustrywholikesgooglealo
By that logic, Yahoo! Auctions would have killed eBay years ago.
There are no karma whores, only moderation johns
Domain squaters are no better than the lowest type of Spsmmer, they are just the lowest forms of life.
Why in the world would you say that? I mean, OK, if you register a name belonging to someone else and hold it for ransom that's one thing. But just registering what you think is a good name with the hopes that you'll be able to resell it for a profit, I don't see the harm in that.
Is a real estate investor the second lowest form of life? Is a baseball card collector the third worst?
First, "registering what you think is a good name with the hopes that you'll be able to resell it for a profit" is not the same as registering various permutations of *Google* or any other trademark you don't own. And second, these Spamer companies that own acres of common and useful words that invariably lead to pseudo-search sites that when I navigate away try to make me set them as my home page, these people should be shot. They are hogging decent domain names from people that might actually use them for useful things, their sites boarder on fraud, they serve no useful purpose at all.
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
11 dollars seems pretty steep, but then again I've never used eBay or PayPal. Can you break that down for us? How much was payment-processing-related, and how much was listing-and-selling related?
I could understand maybe $1.50 or $2.00 for transferring $75.00. Pure interchange and assessments on a card-not-present Visa or Mastercard sale will cost most of that amount, and the processing company needs a little overhead to cover the small fraction of transactions the processor ends up paying for.
In general, payment processing has to have a cost, because there has to be oversight and oversight costs money. The only free way to transfer money is the buyer placing cash in the hand of the seller. Everything else has people in the loop somewhere. Some kinds of payment processing even have accountability -- fraud management, chargeback rights, stop-payment rights, etc. Those investigations cost money also, and that adds to the price of a transaction.
"Intrinsic value" is a slippery concept.
People are willing to pay for convenient, spendable stores of value, and if they trust that store of value, they're often willing to pay far more than what that item would be worth if it wasn't used as money.
Take gold, for example. Economists talk about "monetization" and "demonetization" of gold, referring to how gold prices shoot up when people start buying it as a hedge against inflation, then fall back down again when inflation fears diminish or an inflationary episode dies down. Historical gold prices: note how despite inflation, the dollar price of gold in 2001 was less than half the dollar price of gold in 1980.
It's true that federal reserve notes have next to no non-currency value (they're a perfect size for bookmarks, and I hear they burn pretty well), while gold is useful for jewelry, for electronics, and as a catalyst. But gold's practical price is probably somewhere in the low 200s; the rest of the price of gold comes from the same place the value of federal reserve notes came from: it's a convenient way to store value. Any other commodity used as money would likewise see its price inflated.
The true advantage of gold (or silver, or salt, or unobtanium, or leaves, or whatever) as a store of value is that the supply of gold is limited by the real costs of finding it, digging it out of the ground, and purifying it, while any sufficiently irresponsible government may decide to finance itself by simply printing more money. Even with a fractional reserve system, the payout requirement keeps the issuer moderate in his dishonesty.
Countering this, using a commodity as money partially denies us the practical use of that commodity by inflating its price and tying up much of the supply in stockpiles, as well as inducing people to put far more effort producing that commodity than would otherwise make economic sense. In addition, inflation of a commodity money can result from a large find of new reserves, or by a technological breakthrough that allows a lot more of the commodity to be produced for a lot less money. Theoretically, it's best for the economy (consistant prices, minimal liquidity problems, etc) if the money supply grows in lockstep with the real size of the economy, and you can (not necessarily will, but can) come a lot closer to that with federal reserve notes than with commodity money.
A legparnasom tele van angolnaval.
This, of course, is absolutely true. I have used it in the past, and hated it. I always transfered money out same day. Once in the bank, I moved over to my non-paypal account. The account signed up with at Paypal was an empty non-minimum balance one. I constantly monitored it for any outgoing, and planned to call bank to stop payment on any activity. If Paypal terminated my account for failure to provide them money back, I really didn't care. I was looking for better payment options anyways, and closing it was not a concern for me. Here's why...
Paypal is especially nasty if you sell any type of virtual services. The specifically say that if you sell a virtual service, be it providing internet, web hosting, member only sites, program downloads... whatever, they offer you zero protection. If there is a dispute, their TOS basically says (last time I read it, and paraphrasing) "We're going to side with the buyer 100% of the time, regardless of any evidence you could provide that the transaction was completed."
Unfortunately, this is a side effect of FedEx/UPS/USPS tracking and reciepts being far more reliable, and no digital equivilant. But, imagine selling someone a years worth of hosting for a theoretical $1000, only to have them complain 10 months later that the service was not up to the advertised standards, and get every penny of their money back. I can understand giving back a partial refund for time not used, but a full refund?
That's why virtual service providers are better going with any other service. I would name what I use, but don't wish to introduce any form of slashvertising here. I'll just say, it sure as hell ain't paypal!
I8-D