Coming Soon: Google GBuy

GBuy has reportedly been in the works, being tested, for at least the last nine months. The Wall Street Journal has described how it’s supposed to work. GBuy merchants will include an icon next to their sponsored links, showing that they’re a “trusted GBuy merchant.” Consumers will be able to store their credit card information on Google as part of the GBuy system, which should facilitate purchasing.

The program won’t be entirely free, of course, though it will be free to start with. After the beta period (and with Google, there’s no telling how long that will last), Jordan Rohan expects that the search engine giant will charge merchants about 1.5 to two percent. That undercuts PayPal’s current fees for Premiere and Business accounts (the kind of accounts that accept credit cards).

Now, it doesn’t undercut PayPal’s fees by a lot. If you’re keeping score, those fees currently stand at 1.9 to 2.9 percent, plus $0.30. But if you’re a seller who completes a lot of transactions, or particularly large ones, those fees can really add up after a while. (During the eight months I wrote freelance articles on the side while working full-time and was paid for the articles via PayPal, I racked up enough fees to make it worth my while to declare them as a business expense on my income taxes).

Aside from the promotion of merchants in the listings, once GBuy is in actual operation, it might not work too differently from paying through Google on Google Base. Indeed, one observer described it as taking the payment system already available through Google Base and extending it to the web via Google’s search engine. Hmmm. Someone in a particularly paranoid mood might say that, by using that approach, Google is trying to leverage one near-monopoly to gain major traction in another, unrelated business area – much as Microsoft did years ago to kill the competition in the browser market.

But that’s not really what Google is after. The search engine giant isn’t trying to get into the online payment business as an end in itself. That explains the lower fees, of course; but the point is that Google has much bigger fish to fry.