Google Wallet to Rival eBay’s PayPal

eBay shares fell about 3 percent today following news reports that Google may launch ‘Google Wallet’ this year - an electronic-payment service to rival eBay’s PayPal:

The move comes amid news reports that Google this year may launch "Google Wallet," an electronic-payment service that could help the Internet-search company diversify revenue. Like PayPal, the service could let users pay for purchases on Web sites by funding accounts from their credit cards or checking accounts.

[Piper Jaffray analyst Safa Rashtchy] noted that Google has a history of launching products that are superior to existing service, with new user interfaces or features. In addition, Google has a large user base to tap and can likely subsidize the cost of transactions with advertising, so it can offer a lower price to merchants.

"Google payment system may not compete directly with PayPal, but it could limit PayPal’s expansion beyond eBay," Rashtchy said.

Ebay shares sink on talk Google eyeing PayPal rival
Reuters