Google to Challenge PayPal

According to a WSJ report (sub), Google is preparing to introduce an electronic payment system later this year, similar to that of PayPal. The service is code named Google Wallet.

Exact details of the search company's planned service are not known, the report said, but quoted people familiar with the matter as saying it could have similarities with PayPal, which allows consumers to pay for purchases on Web sites by funding electronic-payment accounts from their credit cards or checking accounts.

This could put a dent in eBay's revenue, with $233 million (23%) of its revenues in the first quarter, coming from PayPal. The move could also signal Google's desire to diversify its products and reduce its dependency on AdWords revenue, which accounts for 99% of the companies current earnings.

So how likely is Google Wallet to become a reality? Scot Wingo, CEO of ChannelAdvisor, said he believed the payment service would be launched soon.

In an interview, Mr. Wingo said he based his statement on questions from retailers with which his company works. Mr. Wingo said the retailers have asked him whether ChannelAdvisor would support the service, which some believe goes by the code name Google Wallet.

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