Canadian Analysts Favor GBuy
RBC Capital Markets believes Google’s new online payment system, called GBuy, could be the next big thing. The financial services provider, based in Canada, is maintaining its “outperform” rating on Google due to the perceived potential of GBuy.
GBuy is due to be released on June 28. It will take users off merchants’ sites in order to complete payment, which will allow the search engine giant to gather e-commerce data. This could, in turn, drive more precise searches.
“If harnessed, the precision of this targeting could be revolutionary,” RBC analyst Jordan Rohan wrote. He also thinks Google’s plan to designate “trusted GBuy merchants” in its search results may help build a consumer base and generate sales. The label would (in theory) mark safe and secure sellers.
Rohan believes GBuy merchants would benefit from increased click-through rates in another way, as well. Assuming Google’s search algoritithms are influenced by that rate, GBuy merchants might see higher rankings. Some companies may fear that the transaction data will lead Google to charge more for sponsored links in the future, however.
Google has said it will not charge merchants for its payment service for an unspecified period of time. After the beta phase passes, GBuy will probably charge 1.5% to 2%, which is roughly in line with the fees of PayPal, an established provider.
Many people view GBuy as a competitor with PayPal’s recent “off-eBay” intiative. “Short term, GBuy is more negative for eBay than it is positive for Google,” Rohan said. “Longer-term, it could be a game-changer.” It seems like RBC Capital Markets is favoring that possibility.