MOUNTAIN VIEW, Calif. — Google (GOOG) is offering merchants free use of its online payment service as it squares off against eBay's (EBAY) market-leading PayPal. http://www.usatoday.com/tech/products/2006-12-05-google-checkout_x.htm This is exciting news for me - I have used Google Checkout and like it, even though they retain customer info.
Nice. I have been offering Google Checkout payment option on my site but very few people (only a couple) ever used. I hope that more and more people would join and start using it.
https://checkout.google.com/seller/freetransactions.html Wow. Free transactions until the end of 2007. That's going to cost them $$ but will get them increased market share. I expect PayPal will drop fees to compete.
I doubt Paypal will drop their fees. Google Checkout isn't a direct competitor of Paypal as GC has a limited scope of services right now. Plus Paypal's marketshare and brand recognition (and complete domination of eBay) has them in the driver's seat both now and the foreseeable future. That doesn't mean things won't change, though.