Google tests online payment system
CEO Eric Schmidt says "GBuy" system aims to speed purchases on the Web but that it's "not like PayPal at all."
Google's system aims to allow quicker purchases by a consumer from a marketer, and a beta version is expected soon, said Google CEO Eric Schmidt.
"It's not like PayPal at all," Schmidt said when asked about GBuy during a New York meeting hosted by Conde Nast's Portfolio business magazine.
"It makes no sense for us to go into businesses that are occupied by existing leaders," he said. "We want to solve new problems in the payments space."
He said the system is targeted at advertisers and not general consumers, but did not elaborate further on how it differs from PayPal.
"Google management is getting off on a technicality" in saying its purchasing system differs from PayPal, said RBC Capital Markets analyst Jordan Rohan. "A merchant-to-consumer payments system, that's close enough."
In a research note last week, Rohan wrote that Google was likely to launch such a service by the end of the month, saying there was no reason it could not expand to consumer-to-consumer transactions like many PayPal payments.
Google would not charge merchants for the service during the beta phase, but could be expected to take fees of up to 2 percent after some period of time, Rohan wrote.
"You have to target the advertisers first," he said, referring to the need to get a critical mass of merchants on board to make a purchasing system attractive to consumers.
Google executives could not immediately be reached for further comment.