Google Vs. PayPal?

Rob Hof

The Wall Street Journal is reporting that Google plans an electronic payment service that may compete with eBay's PayPal. If that's true, I doubt Google would be dumb enough to take on PayPal directly--especially as PayPal has started to beyond eBay. PayPal's hardly perfect, but it has such a headstart on online payments that it would be very hard to dislodge it very quickly--as Yahoo!, several banks, and even eBay itself (with its Billpoint service, discontinued when it bought PayPal in 2002) found out. PayPal spent hundreds of millions of dollars building trust, navigating regulatory agencies, and honing antifraud techniques, and that's going to be hard to duplicate quickly.

No doubt the folks at Google have something innovative up their sleeves. Come to think of it, I wouldn't put it past Amazon to offer up a payment service beyond its borders as well. And I wonder how long the banks will watch Web payment services eat their lunch. Could be an interesting battle shaping up. But it's PayPal's to lose.

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