Google Plans to Launch Payment Service

Posted on June 19, 2005

The Wall Street Journal reports that Google has plans to launch an online payment system that will compete with eBay.com's PayPal service. Google said the service will be launched by the end of this year. The WSJ article said that if Google does launch a successful payment service it could be a major headache for eBay.

Depending on the exact details, 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. PayPal has been widely adopted by buyers and sellers on eBay's auction marketplace as a way to pay for purchases. Recently, eBay has been trying to expand PayPal's presence as a payment system for other Web sites. In the first quarter, 71% of PayPal's revenue came from eBay auctions, the company says.
"It could be a pretty big negative for eBay if it happens," says Safa Rashtchy, Internet analyst at Piper Jaffray. Mr. Rashtchy said he believes Google is also working on a classified-listing service, which also would compete with eBay, San Jose, Calif.

The Wall Street Journal article also said the name of the service goes under the codename of Google Wallet.