Google vs. PayPal: Is a Battle for the Title of ‘The Online Payment System’ Pending?
The Wall Street Journal broke the news on Friday that they had received information from sources “in the know” about Google, Inc.’s plans to create an online payment system -possibly named “Google Wallet”- to rival that of current online payment leader PayPal, a service of online auctioneer giant eBay, Inc.
While the news kept Internet-related chat rooms busy, it did not come as a surprise to many, including myself. Whispers concerning whether Google was going to join the very slim online payment community began in March when the company formed Google Payment, Corp.
While Google has given no comment on the issue, it’s obvious that the company’s creation of an online payment system is inevitable, if nothing else. For one, an online payment system could be used to process the millions of dollars exchanged between Google, marketers and websites that participate in its online advertising programs and content network. The payment system could also be used to collect payments for use of certain services such as videos indexed by the search engine. Further possibilities are endless because this is, of course, Google.
The impact a Google online payment system would have on PayPal and its parent company eBay, Inc., is still uncertain. While the response on Wall Street says millions with Google’s shares rising $6.40 to close at almost $287.00, and eBay, Inc.’s shares falling $0.81 to finish at only around $37.00, Google Wallet will still have to fight an uphill battle in any attempt to knock PayPal off the top of the hill particularly due to the fact that PayPal’s payment system processed over $6.2 billion in transactions already this year. Not to mention the household-name status that PayPal has achieved for itself with the Internet savvy; it has espoused much trust from online shoppers and surfers, and that is something that Google, while being a brand name search engine, would have to combat from the ground up.
But Google is known for its ability to surprise, after all it was started by two virtual unknowns at a time when, to a large degree, very few knew or cared much about the Internet yet now holds the title as “the” leading media corporation – not just the leading Internet media corporation.
And while very few will argue that PayPal has earned the trust and following it has achieved, a little competition never hurt anyone – except, maybe, a few corporations on the losing end. But as far as consumers and marketers should be concerned – the more competition, the better.
Chris Winfield is the President and Co-founder of 10e20. He has written for various organizations in the past and frequently speaks with the media.