Wednesday, June 29, 2005

Google to annihilate PayPal - thank heavens

Verizon |
NEW YORK (Reuters) - Google Inc. (GOOG.O: Quote, Profile, Research) this year plans to offer an electronic-payment service that could help the Internet-search company diversify its revenue and may heighten competition with eBay Inc.'s (EBAY.O: Quote, Profile, Research) PayPal unit, the Wall Street Journal reported on Friday.

Exact details of the search company's planned service are not known, the report said, but quoted people familiar with the matter as saying it could have similarities with PayPal, which allows consumers to pay for purchases on Web sites by funding electronic-payment accounts from their credit cards or checking accounts.
It's been known for at least a decade that the fundamental security model of credit cards was a very poor match for online transactions. Fraud cases have waxed and waned over the years, but based on recent news reports I suspect the toll on small vendors is getting pretty heavy.

So what are the alternatives to standard credit cards? PayPal is the big one today, but I've never liked them. I've been monumentally unimpressed with their approach to security, or the feeble and unimaginative ways they've struggled with phishing scams and PayPalm spam.

Now, apparently, there will be Google.


(BTW, does anyone remember Microsoft Wallet -- a major component of the very first release of Internet Explorer? Don't think Microsoft has forgotten. Palladium has a role here too.)

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