Rumors that Google plans to offer a service coined Google Wallet that will compete with PayPal are circulating. Last week (6/17/05) the Wall Street Journal’s online edition reported that an unnamed chief executive of a major online retailer had been approached by Google regarding its planned service.
Online payments are a large and growing business. At the end of Q1 ’05 PayPal had 71.6 million accounts which represented a 57% increase in the number of accounts from Q1 ‘05 and handled $6.2 billion in payments which represented a 44% increase in the first quarter ’05 as compared to the same period in ’04..
PayPal charges merchants a per transaction fee of $0.30 (USD) plus a percentage (2.9% - 1.9%) of the transaction. The percentage fee is based upon the prior month’s total dollar volume of transactions with the lowest rate of 1.9% kicking in at $100,000.01.
Read a New York Times article by Saul Hansell at News.com.
It is speculated that Google will offer its service at a discount (or free) to PayPal's to capture market share.
Stay tuned.
Monday, June 20, 2005
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