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PayPal vs Google (Buy)

Posted by Hemos on from the everyone-knew-it-was-coming-eric dept.

pc-facile.com writes "While Google Chief Executive Eric Schmidt confirmed in press accounts that the company was building a payment service, Mr. Schmidt also denied it would directly compete with PayPal. Mr. Schmidt said Google didn't intend to offer a "person-to-person, stored-value payments system," which many people consider a description of PayPal's service. Mr. Jordan (PayPal chief) says he and his team immediately "dissected the wording" of Google's statements. He says he doesn't believe Mr. Schmidt..." There's also a more in depth WSJ article about the service.

5 of 242 comments (clear)

  1. Horizontal Expansion by eldavojohn · · Score: 4, Informative

    Since it's IPO on April 30th 2004, Google seems to be testing the waters of a lot of different markets.

    Granted, they all center on information technology, this company is ever expanding along different product lines. We've seen Google blogs, Picasa, Analytics, Video, Desktop, Talk, Earth, Toolbar, Gmail, Translate, Mobile, etc. And (thank god), they've all been presented to us rather benignly but are they all considered successes?

    And now we observe GBuy, a service to compete with Paypal. Paypal's history has been rocky but they do have a solid foothold as they are almost married with eBay. Will eBay welcome the new GBuy and favor it equally with Paypal?

    Google profits around $17 billion a year--do they really need to become a money transfer service? Ebay reports $4.5 billion a year, will they be sharing some of that with Google? Will a cut of that even matter to Google?

    What's interesting is to see if they actually take a cut (a la Paypal) or if they just continue Google ads through the pages on the service to pay for all of the legal work that comes with claims and fraud. They have the resources to do it and this would probably kill sites like Paypal that take a 3% or more charge on each transaction.

    --
    My work here is dung.
    1. Re:Horizontal Expansion by Alex+P+Keaton+in+da · · Score: 4, Informative

      Not to confuse the issue with facts-
      Don't forget that credit card companies charge businesses that take their cards. When you buy gas with your credit card, the credit cards company (mastercard, visa, whatever) charges the gas station to process the payment, sometimes as much as 5 percent. So your statement "What's interesting is to see if they actually take a cut (a la Paypal) or if they just continue Google ads through the pages on the service to pay for all of the legal work that comes with claims and fraud." Ignores the largest expense that PayPal or Potentially GBuy has....

      --
      And All I Ask is a Tall Ship And a Star to Steer Her By
  2. Re:Why Bite the Hand that Feeds? by squoozer · · Score: 4, Informative

    I have a merchant account and while the fees are lower than PP they are still a total rip off. Perhaps it's cheaper on the US side of the pond but over here in the home country (sorry) if you are shifting less than £5000 worth of stock a month you probably would be better off with PP. Having said that, I think a real merchant account makes a business more professional looking so there are some pay backs.

    I'm going to go back to dreaming about selling £5k worth of stock in a month.

    --
    I used to have a better sig but it broke.
  3. Re:Why Bite the Hand that Feeds? by Superfreaker · · Score: 5, Informative

    The times they are a changin'
    That old MP argument is not going to hold up forever:

    PayPal Announces Micropayment pricing:
    http://www.paypal.com/activate_micropayments_5pct_ plus_5cents_new_account_pricing

    On August 31st, 2005, PayPal announced new Micropayments rate of 5% + $0.05 per transaction.

    The rate is available now, to U.S. merchants who sell digital content to U.S. customers, when PayPal is the sole payment solution offered to customers for micropayments transactions.

    Merchants who wish to use PayPal's micropayments pricing will need to open a new PayPal account through the account registration link at the bottom of this note.

    Each PayPal account is associated with only one merchant processing rate. That rate determines the fee that's applied to funds received into that account (additional information on PayPal's Standard Fees is available at: http://www.paypal.com/cgi-bin/webscr?cmd=_display- fees-outside ). For example: if your Premier/Business Account rate for receiving funds is 2.9% + $0.30, using PayPal's 5% + $0.05 micropayments rate would reduce the total transaction fee charged to payments received below the value of $12 (per payment). However, if you accept payments that are greater than $12, you would pay a lower processing charge by accepting the payment into the account set with the 2.9% + $0.30 rate.

    If you wish to leverage PayPal's micropayments pricing, please open a new browser window and paste the link below into the URL field to open your new PayPal account with micropayments pricing of 5% + $0.05.

  4. Re:Why Bite the Hand that Feeds? by adisakp · · Score: 4, Informative

    I remember when paypal was "we'll make our money off the float, totally free for you!". That lasted what, 8 months?

    And they make plenty of money off the float. However, they end up returning it to you -- in exchange for your social security number and other personal details -- if you elect to "invest" in the PayPal money market. They pay something like 4.28% which is the highest paying money market fund available right now. Until now, they charged nothing to you for administrating the account but soon they're going to lop 0.25% off for administration which is still cheap.

    Paypal has obvious costs for credit card transactions but I'd like to see a business account where cash (paypal funds) or check transactions were discounted or free. The limit the personal accounts to the point where they're nearly useless.