Google developing new micropayment system
It would appear that Google is in development on a micropayment system that has the potential to not only make the papers happy but could also lead to direct competition with PayPal.
The Newspaper Association of America (NAA) contacted Google about potential payment systems to make up for the revenue it sees its members losing from the news aggregation that the Google News section does. According to NiemanJournalismLab, Google responded with an eight-page document (PDF available here) that spells out several different options, but the obvious thrust of the paper is that Google is cooking up something that could end up making PayPal sweat a little bit.
Google is proposing a micropayment system that would stem off of its existing Google Checkout product. In short this means that Google would handle all of the transaction costs for the newspapers selling subscriptions via its site, and, in turn, Google would keep a percentage of the sale for overhead and to make a little profit. The proposal is similar to the Apple App Store model in where Apple keeps 30 percent of a sale of an app to cover credit card processing and so on.
While this initial information is focused at newspapers, there is no reason to believe this payment system would end up being limited only to that field. If it was to end up going out to more industries, and eventually to everyone, we could be seeing the dawn of the first serious competition to the eBay-owned PayPal. There have been numerous other sites that have attempted to take on PayPal over the years, but none of them have had a name like “Google” to back them up.
For now it is a wait-and-see game for Google and the NAA to decide what they want to do, but even if the newspapers don’t adopt the system, it is doubtful that Google will stop development on this new ecommerce tool.
Related Posts:
