EBay Bans Google Checkout

EBay customers won't be able to use the newly launched Google Checkout service to buy products, according to the auction Web site.

Google Checkout is now listed among other payment services such as Netpay.com, Qchex.com, ePassporte.com, and BillPay.ie that are not permitted on eBay.

The Google offering lets online shoppers store credit card and address information with Google so that they don't have to re-enter the same information each time they buy an item from a different Web site.

At the time of the service launch, in late June, Google took pains to insist that the offering would not compete with PayPal, the online buying service that is owned by eBay.

Attempt to Fend Off Competition?

EBay did not return calls requesting details about why it is banning Google Checkout but an analyst says that the potential competition to PayPal is likely to blame.

"I think there's only one answer here which is [eBay is] afraid for the competition," said Jaap Favier, a vice president at Forrester Research. "Google Checkout could be an enormous threat for PayPal."

Even if the current Google Checkout service doesn't exactly compete head on with PayPal, it could in the future. Favier expects Google to become increasingly active in e-commerce in the longer term and it would make sense for Google to boost the Checkout service to offer more capabilities that could make it similar to PayPal.

On the eBay Web page that describes its acceptable payment policy, it says that when new payment services arise, eBay will evaluate them to decide if they're appropriate. Some payment services may not be permitted on eBay although they may be appropriate services for consumers in other contexts, the page says.

The page also says that eBay considers a number of factors to determine which payment options will be accepted including enough financial, privacy, and fraud protection; the identity, background, and other business interests of the payment service provider; and the regulatory status of the provider.