Watch out PayPal - Google Checkout is here

Watch out PayPal - Google Checkout is here
SAN FRANCISCO - Google Inc. is on the verge of launching an online payments system to rival that of PayPal. The new feature called Google Checkout is all about boosting Google's main source of revenue; selling advertising.

The service will process e-commerce payments made by consumers to merchants. A consumer-to-consumer feature is also on the anvil, but at the moment the focus is on merchants. This service was long anticipated from the Mountain View, Calif.-based company as a potential challenge for eBay's PayPal. The latter focuses on consumer-to-consumer payments as well.

"We have an emphasis on search, find and buy that we've been looking at since the earliest stages of this product," said Benjamin Ling, lead product manager for Google Checkout. Google's initial [partners in this venture are Starbucks, Timberland and Buy.com.

Google Checkout merchants who use the AdWords program will have their names highlighted in a shopping cart. Merchants can also expect to earn free credit card processing depending on their monthly ad budget.

"Many shoppers decide what they want to buy using search, but in the end they often don't complete the transaction online because they find the checkout experience complex, inconvenient and uncertain,'' said Salar Kamangar, vice president of product management at Google. "Google Checkout simplifies and improves this process for both consumers and merchants.''

Analysts feel Google is sitting on a potential goldmine, but needs to be careful of fraud in the initial stages. "I really think it's important for Google, as it matures its company, to come up with revenue streams other than advertising, and this is big," said Allen Weiner of Gartner Inc. "It's a nice, predictable revenue stream that will go a long way as more and more competitors come in and offer advertising." Google has also tied up with Citigroup Inc.'s Citi Cards to promote Checkout on its web site.