Monday, February 06, 2006

GBuy vs. PayPal

Mylene Mangalindan at the Wall Street Journal reports that Google is working on a payment system called GBuy that will allow customers to buy from merchants through Google:
For the last nine months, Google has recruited online retailers to test GBuy, according to one person briefed on the service. GBuy will feature an icon posted alongside the paid-search ads of merchants, which Google hopes will tempt consumers to click on the ads, says this person. GBuy will also let consumers store their credit-card information on Google.
There was a rumor seven months ago that Google was developing a payment system called Google Wallet. Since then, Google Wallet appears to have been used for payment internally by Google for Google Video and other products. Now, it appears that Google Wallet may be about to drive a new external fixed price marketplace, GBuy.

This seems to be part of an ongoing trend where Google gets further and further into eBay's business. A year ago, Bambi Francisco at CBS Marketwatch reported:
Will search advertising ultimately become a better mousetrap for sellers? Or to what extent will search advertising take away the potential dollars that were once expected to flow onto eBay's marketplace?

As one eBay seller said to me via e-mail: "Most sellers are like me and didn't really think there was life outside of eBay, but we are getting educated fast."

Another seller said he's decided to put up his own Web site for $19.95 per month and buy keywords on Google and Yahoo's Overture.

"Products on Google are not under as much pressure as eBay so you can typically get 5 to 10 percent more for your products on Google."
Already, many small merchants sell directly using Google AdWords to direct traffic to their site. But, closing the transaction has required setting up a website and payment system, and customers often don't like entering their credit card on small merchant websites.

Now, with GBuy, Google may be able to cleanly handle the entire transaction, no fuss, no effort.

[via Inside Google]

Update: A month later, Barry Schwartz is part of a closed beta test of Google Payments and says, "The best way to describe Google Payments is calling it a PayPal alternative."

8 comments:

Anonymous said...

gpay and paypal will always be one of many options that users will have to purchase an item. Neither will ever be more than this. If I m a retailer I would want to except payment from as many sources as possible. I would not want to lock into any option that would exclude a fairly large amount of consumers. Paypal accepts credit cards as well as debit cards, and you can also use your paypal account. If Gpay is to succeed it will have to at the very least mimic all of the paypal options. Once this is done what could the possible points of differentiation be?

Markbnj said...

Greg: See my post entitled,
Google WILL own EVERYTHING
http://markbnj.blogspot.com/2006/02/tech-googlenet-googletv-googlepc.html


(trackback: http://haloscan.com/tb/markbnj/113933267662612919 )

Which discusses in great detail what I think Google will be doing to get EVERYTHING in ONE neat package...

Murali said...

Success in the Online payments business to a large extent is a funtion of how well the organization can manage fraud & risk

Does Google have a track record on this front ?

Greg Linden said...

Good point, Murali. Though, frankly, my understanding of how PayPal dealt with fraud was to throw massive piles of money at it for a few years.

In Google's case, I think they may have more transferable experience than it might appear. After all, preventing fraud is a big issue in Google AdSense.

Anonymous said...

any competition that can improve the market is well appreciated by both sellers and buyers. Paypal's customer service is atrocius and slow. They do not help low-volume sellers much and their fees are extremely high. With competition, it will force market fees to lower - benefiting sellers.

Anonymous said...

Gbuy, I can't wait. I've heard too many bad stories concerning Paypal. It scares me. I don't trust them. I do trust Google. Paypal will lose alot of business as a result of their shady practices. Serves them right. You can't ignore the vast amounts of complaints about Paypal. Forshame.

Anonymous said...

Just Google "PayPal" and you can read page upon pages of bad experiences with PayPal.

I think some good competition is well needed, and IMO hopefully will put PayPal under... they are a bad excuse for a "business".

Anonymous said...

Paypal are total cock suckers.. Excuse the language but they take ages to resolve account limitations and generally suck all round.

I dont think Googles solution will be perfect but Paypal needs some competition as does eBay.