Google is preparing an online- payment system that would compete with PayPal, according to an online retailer who has been approached by Google to take part in the effort.
In addition to representing a direct challenge to eBay, which owns PayPal, the largest Internet payment system, the move signals Google’s intention to become much more deeply involved in online commerce.
Google’s flagship search engine and its Froogle shopping service are significant sources of customers for Internet stores. But so far, Google’s only way to profit from its presence in online shopping is by selling advertising that appears next to its search results and on Froogle pages.
Google has long been rumored to be developing a classified advertising service, one that would compete with eBay and the popular free site Craigslist. A payment system would help Google bring into its marketplace individuals and small businesses who aren’t authorized to accept credit cards online.
Discussion of Google’s plans arose on a panel at a forum for investors held last week by Piper Jaffray, and the talks were reported Friday by the online edition of The Wall Street Journal. Google was not a part of the panel.