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In a move that furthers its strategy to expand payment processing beyond auction activity, PayPal Inc. is rolling out a new transaction tool designed to allow small and medium-size Web-based merchants to accept all forms of payment entirely through PayPal, apparently eliminating the need for gateways or other third-party processors.
Separately, the processor, a unit of San Jose, Calif.-based online auction giant eBay Inc., says it has no comment on reports that search-engine kingpin Google Inc., Mountain View, Calif., is planning to launch an online payments service later this year that would rival PayPal.
The new PayPal transaction product, which the processor is calling Website Payments Pro, is the company’s first non-hosted service. PayPal says it speeds up transactions for customers using PayPal accounts and streamlines processing for non-PayPal buyers who use credit cards. It also includes a virtual terminal to allow merchants to manually enter card transactions received over the phone, by fax, and through the mail.
PayPal accountholders, for example, can pay on merchants’ Web sites with three clicks, PayPal says, including a brief switch to PayPal’s site for login and payment confirmation before a redirection to the merchant’s site for checkout. Credit card transactions for users without PayPal accounts appear to the user to be handled entirely on the merchant’s site, with back-end processing handled by PayPal. Roughly half of all PayPal transactions are card-based, with the remainder flowing through the automated clearing house.
PayPal, which depends on online auction traffic for about 70% of its transaction volume, last fall began moving into the broader market of payment processing for e-commerce merchants (Digital Transactions News, Sept. 30, 2004). PayPal is charging merchants $20 a month for Website Pro, though it is waiving the monthly fee until an unspecified time later in the year. The product also carries a per-transaction fee of 2.2% plus 30 cents up to 2.9% plus 30 cents. No other PayPal service carries a monthly fee, and per-transaction pricing for these other products remains in the 1.9% to 2.9% range.
As part of the rollout of Website Pro, PayPal announced it is regrouping its products under four categories: Website Payments Standard, Website Payments Pro, Email Payments, and PayPal as an Additonal Payment Option.
Meanwhile, reports emerged over the weekend that Google plans to introduce an online payments service similar to PayPal some time this year. The new service, reportedly called Google Wallet, could be linked to a new classified-listing service the search giant is reportedly working on. Google, which in April filed papers in California to incorporate an entity called Google Payment Corp., would not comment.
A PayPal spokeswoman would say only that the company is “waiting to see something” emerge from Google. “It’s just rumors and speculation,” she said. “There’s nothing to comment on.” Google officials have said, without giving specifics, that they are working on a payment service but that do not intend to compete with PayPal.
