PayPal vs Google (Buy)

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.

Comments

Why Bite the Hand that Feeds?

[mfh]

How can Google create an online payment system without competing with PayPal? Google doesn't want to piss off eBay, because eBay is one of Google's largest advertisers -- so I completely understand why Google would say that they won't compete directly against PayPal -- I get it. Never bite the hand that feeds. (great NiN tune!)

But what I don't understand is the resulting system... what could it possibly consist of if it can't compete against PayPal? Perhaps they will use PayPal's services within the scope of the new system and defer customers to PayPal for the actual transactions? Partnerships happen when companies fear retaliation or when companies see greater profits by working together, and I think it's possible that is what's going on, in this case. Either that or we'll be seeing a very crippled new system from Google.

Re:Why Bite the Hand that Feeds?

[stinerman]

Google mighn't want to piss of eBay, but someone has to provide an alternative to PayPal sooner or later, and it might as well be them. I can recall quite a few times that sellers lost a sale to me because they only accepted PayPal. If there was a viable alternative with a sane TOS, perhaps I'd use it. Until then, I'm stuck ordering from merchants who take credit/debit card orders.

Re:Why Bite the Hand that Feeds?

[HugePedlar]

I got quite excited about the concept of micropayments a few years back. If I could sell stuff (software, music, videos, etc.) for £0.10 per download I might get rich. Maybe not, but the idea is cool.

Unfortunately, even if Paypal weren't the evil beast people proclaim it to be, it has still stifled the online payment market through its outragous fees for transactions. Payments of less than £1.00 are worthless.

If Google can provide a viable model for micropayments it could take over a different sector of the market by catering to the smaller purchasers.

Of course, I'd be just as happy if Google pounded Paypal into the dirt.

Re:Why Bite the Hand that Feeds?

[duffbeer703]

I could see Google doing something like a credit union, where people loan out money to other members. Or even something simple like a billpay service.

Google's MO is exploiting content & social relationships to sell ads. A Google money service would use the same techniques to maximize loan returns or to target ads.

Think about it, as an advertiser, I could potentially use Google to target results to people with $x in their checking accounts.

Re:Why Bite the Hand that Feeds?

[NoMoreNicksLeft]

I remember when paypal was "we'll make our money off the float, totally free for you!". That lasted what, 8 months? Now they fee you to death, police what you can buy and sell, and penalize you whenever they feel like it with absolutely no recourse. I'm trying to set up my own paysite soon, but I can't really use them, and I can't afford a proper merchant account.

I hope google kicks their ass. Hell, I hope google sets up its own auction site.

Re:Why Bite the Hand that Feeds?

[thrillseeker]

One thing Paypal does not do well is micropayments, or payments under $1, but it's something Google does very well. Consider the millions of virtual pennies they daily count for AdSense. (or is it AdCents?!)

Exactly. Paypal could eliminate much of the incentive to produce an alternative by simply eliminating the $0.35 charge. The 2.9% is (barely) bearable, but the fixed-price charge eliminates the entire world of micropayments.

Additionally, when they started charging percentages for both personal accounts, a requirement to deal in any significant amount of money, they made a lot of people's shit lists. Paypal needs to get aggressive about being viewed as cost-effective at all price levels - their relatively high percentage rate and fixed minimal fee causes them to only be attractive to a general audience (which is most of the potential world) for a narrow price range. If a company can't make a profit by skimming a single penny from every online transaction then the problem is internal to the company.

Re:Why Bite the Hand that Feeds?

[TClevenger]

Would you pay 1c every time you opened Google's continuall-improved word processor?

No. I'm happy with OpenOffice, and despite what Microsoft tries to tell us every other year, word processors have not improved substantially since Office 97, and are certainly not worth the $200 or whatever the hell MS is charging nowadays.

But for services that require work to keep current, such as Google Maps, or hosted apps without a good open-source alternative, I would be happy to pay.

Re:Why Bite the Hand that Feeds?

[Rude Turnip]

"If there was a viable alternative with a sane TOS, perhaps I'd use it. Until then, I'm stuck ordering from merchants who take credit/debit card orders."

On a similar rant, I generally won't do business with anyone on eBay who doesn't explicitly say that they will accept US Postal Money Orders. Personally, I prefer to use Paypal, but accepting USPS money orders is the gold standard for any merchant in my book. Why? In my book, anyone that won't accept such money orders is a potential fraudster, afraid of the law. If anyone screws around with a transaction that involves a USPS MO, it turns into a mail fraud case.

Yes, please.

[jfisherwa]

PayPal is top on my list of evil Internet companies. Maybe it's top on Google's as well.

Re:Yes, please.

[ionpro]

Google doesn't do anything of the sort. Google.com is provided completely uncensored to Chinese audiences. However, the government disables cached pages, translation, and a few other services. It's also very slow, because it has to go through the firewall. All Google did was provide a point-of-presence inside China for google.cn. They would be shut down for this point of presence if they didn't at least pay lip service to Chinese Internet law. As the silly ways to break the Google filter show (searching in UPPERCASE, adding a period, ...) it's obvious Google is doing as little as possible to ensure the government doesn't shut them down. But people are protesting their so-called human rights violations. It's rediculous, and the only reason people do it is because Google has become big enough that it's cool to bash them.

Google philosophy is that they can make more money, long-term, by doing no evil. I've yet to see anything from them that shows they've abandoned that philosophy.

Can third party transfer survive?

[dada21]

As the banking cartel finds new ways of transfering money "instantly" I wonder if Paypal (and Google Buy) will be able to last without actually becoming licensed and regulated banks themselves. The banking industry has the most collusion (and conspiracy theories) of any industry you'll ever research, and I don't see them just giving up the control of the currency base. Paypal appeared out of the blue (in a bank's reference time) with their services, and it wouldn't surprise me if the banking cartel creates a new standard for money transfers that puts up huge roadblocks for Paypal in the name of "fighting terrorism and money laundering."

I don't like paper cash, and I definitely don't like digital cash. The banking cartel, on the other hand, worked very hard to separate paper receipts for gold from the actual gold, and then the paper receipts became valuable. Now they've made almost 80% of currency digital already (compare M1 versus M3 money supply figures), and I'm even more hesitant to become part of that system. Paypal has embraced it entirely, but I wonder how quickly they'll be forced out of the business if they don't become part of the system.

In the end, competition is destroyed, and we the consumer will end up with pretty much what we've always had.

good positioning for google

[DeveloperAdvantage]

Google has done a great job positioning themselves between consumers and basically anything they want to purchase. If you think about what a consumer needs to do when they make a purchase, two key steps are first to find something you want and then secondly to pay for it.

Through their search engine and paid advertising, they basically own Step 1. They act like a gatekeeper, deciding who sees what and really having a tremendous impact on the success of at least some businesses.

As for the second step of paying for an item, they don't yet have a presence, so this is the logical next step. When their system goes forward, I suspect eventually a little slice of every transaction will go into google's pocket.

Eventually people will start talking about paying a "google tax". Businesses will need to recover the expense of advertising and the expense of the transaction. Guess who they will recover it from?

HTTP status code 402

[DarkMan]

Someone is way ahead of you!

Re:Your understanding of money is incomplete

[SeattleGameboy]

Man, that is a lot of BS...

For your information, Hyundai cars are rated consistently better than BMW in reliability (http://money.cnn.com/2004/11/08/pf/autos/cr_auto_ reliability/).

Sure, BMW may save you a lot of time in getting a chick in bed, but not in time spent in shop.

Not every good is valued on equal terms. Some are valued for its utility (save time), some are valued for its rarity (supply is significantly lower than demand), and some are just valued high because they can (say, Versace bags - they certainly don't take 1000X more to produce or last 1000X longer than a normal bag, but that does not stop Versace from pricing them 1000X more than a normal bag).

Perhaps you should come down from your high-CEO horse and stop sprouting your bugus arguments on how you are so "worth it".