Google CEO Confirms Online Payment System

didde writes "Reuters is reporting on statements that Google's CEO Eric Schmidt had made regarding Google's upcoming payment system. Apparently they're not looking to compete with PayPal." From the article: "Schmidt said Google does not intend to offer a 'person-to-person stored-value payments system' like PayPal's, in which money briefly resides in PayPal's control during the transaction, but he did not give details of how the Google system would differ."

Comments

Will they play like a bank

[Anonymous Coward]

and assume resonsibility for financial mistakes, i believe this is where Paypal are the scam, look like a bank but un-regulated and assume nothing

Please compete with paypal.

[BillGodfrey]

Paypal need a competitor.

Re:I wonder ...

[Mr Guy]

If you believe the paypal sucks people, that essentially IS PayPal's system.

Micropayments

[QMO]

I wish we had a few more details.

On the surface it sounds a little like something that could evolve into the micropayment structure that could end spam.

Re:That's a coincidence...

[freshman_a]

I detect sarcasm...

It's very possible they aren't trying to compete with PayPal. My bank offers online bill pay, which is an online payment system, but I'd hardly call it PayPal's competition.

Re:Google

[mister_llah]

There is more than a fair share of people who just don't like PayPal... and there is a lot of brand strength in 'Google'...

To quote nuke satellite monitors, "Confidence is high! Repeat! Confidence is high!" ... (relating to Google) ...

===

Will it kill PayPal? No. Will it bite them a bit? To be sure. No matter what Google will use, as long as it offers a secure means for an online transaction, it will hurt PayPal... but they'll survive...

Refreshing Change

[alvinrod]

From Article:

Schmidt said Google does not intend to offer a "person-to-person stored-value payments system" like PayPal's, in which money briefly resides in PayPal's control during the transaction, but he did not give details of how the Google system would differ.

Even though companies are out to make money and occasionally have to step on the toes of another company if they want to turn a profit, it's nice to see that not all computer business is so cut-throught. Maybe Google has realized that a little healthy competition is good, but more than likely they have slightly different aims or are trying to tie it in more with the rest of their services in a way that paypals method doesn't work.

Companies need to realize that crushing the competition and taking control of the market isn't going to be healthy for the consumer. Look at some of Microsoft's (Not to pick on them, but they're an obvious example) products like Internet Explorer. For a while it was the best browser around to many people, but after it gained control , Microsoft stopped upgrading it and fixing it, making it a rather sub-par product today.

To those of you who say that Google or any other company wouldn't fall into the same trap if they gained market dominance is plain ignorance. Go ahead and root for Google, Apple, Sun, AMD, or any other underdog company, but just remeber that they're as capable as being as evil and ruthless as some people feel that Microsoft, Sony, Intel and other industry leaders are today.

Re:Refreshing Change

[Kombat]

Companies need to realize that crushing the competition and taking control of the market isn't going to be healthy for the consumer.

Actually, no, they don't. Take a look around you. Capitalism doesn't care a whit about what's "healthy for the consumer," but rather, "what's healthy for the shareholder."

Its coupons silly

[cmdr_beeftaco]

To quote the article "The payment services we are working on are a natural evolution of Google's existing online products and advertising programs, which today connect millions of consumers and advertisers"
So an advertiser can give you 5 bucks off if you buy from them. Or maybe reward points to use in the network.

Re:Introducing the Google Credit Card

[aussie_a]

An online only credit card of course? I'm thinking Google might actually be offering to hide your credit card for you. Like the paypal system, except no money will reside in Google's control. You give them your credit card and bank number and they debit and credit you money without being in their control.

The advantage to this is that you don't have to give your credit card number out to anyone, and them having your Gaypal id won't let them do anything (except to try to guess your password or give you money).

I personally would prefer a competitor to Paypal, as from what I've heard Paypal isn't the best company to work with. That way I only have to transfer money once or twice (and don't get hit with a fee for every $0.50 purchase I make) a month.

Another speculation?

[coolsva]

Rather than being a pure paypal replacement, why can we assume google is going towards micro payments. Follow me here, google searches open web pages, but also some closed databases (AP,NYT etc). You get a snippet of the result, to read the complete document, you click the link, google deducts $0.02 from your 'wallet' and shows you the page. Google pays WSJ $0.018 and pockets the rest.

At the end of the day, you are happy because you got to read the article for $0.02, WSJ is happy because they didnt have to bother about managing subscription (which you were unwilling I assume) and still got the $0.018 and google of course, got the $0.002. Everyone comes home ahead. Many have tried micropayments, but if there is anyone who can do it, it is google

What you meant to say was

[mapmaker]

We need a Paypal competitor. Paypal needs a competitor like it needs a hole in the head.

Banks need to wake up.

[el_womble]

This is damning to the banking industry. The age where they can get away with bank charges should be dead and burried. The idea that there are 10s of clerks monitoring each transaction, and therefore incurring a service fee is archaic and false. We are now paying to maintain a computer system, which if it was commisioned properly should have its costs covered by the interest they gain from investments they make with the money the hold for their clients.

In the UK at least, consumers are free to transfer money between accounts for free. But it takes between 3 and 5 days so they can gain interest (what were they doing the previous x days when it was in my account?). Businesses are routinely charged £0.20 a transaction and the transfers still take 3 to 5 days!!! How is this fair?

Banks have enough ways to generate money without charging buisnesses for micropayments.

Re:Global coverage?

[jrumney]

but why they can't just register anybody with reasonable credit card is beyond me.

Because there are a lot of Nigerians and Russians out there with a list of "reasonable credit cards".

Re:How does this work?

[TykeClone]

If all they're doing is creating ACH transactions from one account to another, the money never will reside with them.

Re:How does this work?

[crlove]

That makes sense, but...

2) ...
3) Profit?

Can they keep a cut of that transaction?

I don't think it's micropayments

[jfengel]

It could be, but I'm finding it hard to imagine a micropayments strategy that couldn't be described as "person-to-person stored-value payments system".

Micropayments for reading articles are person-to-website rather than person-to-person, but the former would be adapted to the latter really, really quickly, at least if they allow anybody who sets up a web site to be a payee. But maybe not; I'll get back to that in a second.

And micropayments are usually "stored-value payments systems", because the best way to reduce the overhead is to give the central guys $20 and have them shift $.02 from one account to another (which is cheap) and only occasionally turning it into real money (which is expensive). Of course that's effectively what Paypal does.

Perhaps I'm misreading Schmidt's statement, but it just doesn't sound like micropayments to me. At least not generalized micropayments. You may be spot on with the limited notion, where the only valid payees are large corporations like the New York Times. It would still be a stored-payments system in all likelihood (you just can't charge $.02 to a Mastercard), but the asymmetry might make it profitable.

Re:well what about

[fulldecent]

"Buffering" money in Paypal is how they make money. Unless you have an account sweep setup (read Paypal Hacks) then you will have money in your account after each transaction. That money collects them interest, unless you use the paypal money market fund.

If you never withdraw that money, that's their profit. If you pay fees for a person-to-person transaction and the money is already in paypal ("buffered") they don't have to pay fees to initiate the transaction. That money is profit.

By removing account balances, you have removed all possibility of profit, reducing them to broker for other transaction systems: credit card, checking account...

Google already offers micro-payments

[ramam]

Adsense is essentially a micropayment platform as is Y! ad technology, consider: 1 your click transfers money from advertiser to adsense 2 they are concerned about 'click fraud' 3 advertisers will pay *anyone* to get you to look at their stuff; google and others offer you services in exchange for you looking at the ads they sell