Google Checkout UK to take on PayPal

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Search giant Google has launched its own online payment system in the UK, taking on market leader PayPal.

Google Checkout will allow users to create an account directly from a retailer's site with minimal personal details. After that, they can sign in once and buy online with just two clicks, the company said.

But Checkout will only offer customer-to-merchant transactions, while PayPal also allows individuals to transfer money.

Available in the US since June 2006, Google Checkout hasn't made much of a dent in PayPal's market. According to Forrester Research, 23 per cent of European online shoppers paying with PayPal, but most online transactions are still via direct credit card payments.

PayPal is owned by eBay, which has banned Google Checkout for payments on its auction site.

Checkout will be tied to the search giant's advertising program AdWords. For the rest of 2007, businesses will be offered free transaction processing. Next year, customers of AdWords will get £10 in free payment processing for every pound they spend on advertising. Those who don't use AdWords will be charged 1.5 per cent of the item cost plus £0.15 for each transaction.

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