Because PayPal cannot protect sellers or buyers with virtual items or services, which though PayPal itself is providing a virtual service. -.-
I use paypal as my transaction processor. I hate the charges they levy on me. because I focs on selling lots of items cheaply paypal are sometimes taking almost 50% of my OHs. However I know that all of my customers have paypal so I wont lose any. If I changed to Gbuy (or whatever they are doin) then I might lose sales from peole who can't be bothered to sign up to google wallet. Going to be a very difficult one to balance for me and at the end of the day it comes down to switching costs whether people will move or not. The fact is although paypal is expensive it is so very convenient! It will be a slow transition to G in my opinion. But hopefully it will buck paypals ideas up. Notting
Even if Google steps up into PayPal's market, PayPal will still be the most popular. Want an example? Firefox stepped in for IE and what? IE is still the most popular. Why? Because the average user is not a webmaster. Same with GBuy, people won't convert because PayPal is Ebay's company and Ebay is a number one association of internet for an average person. yeah sure, a lot of people know about Google but they still think that number one purpose of internet is garage sale (Ebay)
PayPal does suck and freezed my account with over $10K in it for 6 months even though I gave them everything they asked for (which was a lot). I use a bunch of different services now. I suggest everyone check out alertpay.com, very good service and I hope they will take the market share away from stupid paypal.
There really isn't any one service out there is more deeply entrenched into the net than Paypal. Even Google is gaining negative press against some its more newsworthy misgivings. Remember privacy and telecom issues of the early to mid-90's. It is also possible to for Google to be large enough to get a foothold into the online banking service by capitalizing off of Paypal's well-known security vulnerabilities.
I'm not sure that's such a good example. Google is a 125 billion dollar company. If Google gets behind something that is competes with Paypal, Paypal will be history. Also, I believe Firefox is now up 10% now with more IE users converting everyday.
Paypal will never go away because they are tied in with eBay, the webs top retailer. People can use plently of other services but they choose to use PayPal just because it is more common. If eBay was shut down then there would be a even market for other company's to gain market share but that wont happen unless someone takes out eBay. It would be very hard for any other company to be on the same level as PayPal, they took some time to get popular (even paid people to join) and if Google launches their system it will take them some time as well. I personally thing the person that should enter the market is Yahoo, they already have the auctions and they can tie it in with that... but of course they would have to improve the auction system to be more appealing than ebay.
I'd like to see Yahoo get in on this as well, but it looks like they tried already and gave up. Anyone know what happened to paydirect.yahoo.com?