Earlier this month the Wall Street Journal reported that PayPal's president was obsessed with Google entering the payments business. BuyGoogle doesn't usually post on every new product unless, like Google Video or the Web Accelerator, it has strategic implications for investors.
When Google Video was re-released in January with the ability to buy TV shows and movies, I argued that the real news was not the video store, but the marketplace for paid content that Google just created. The payments piece is a critical component of the marketplace, and it works really well from a user's perspective. Just two clicks, and your content is on its way.
The WSJ article speculates that Google is entering the payments business in a big way, allowing third-party merchants to accept Google Payments right alongside PayPal and credit cards. BuyGoogle commented on other blogs like InsideGoogle and Battelle that Google Payments was old news -- it had already been quietly released with Google Video. And I also argued that Google Payments would likely be used where Google acts as the market maker (such as for paid content), and not as a general payment service for third-parties where Google doesn't make the market.
When you make a purchase of goodies at the Google Store, you now pay with your Google Account. And your purchase is recorded right along with other purchases from other vendors -- like Google Video. It's easy to see how Google can use their payments infrastructure to make a market in all kinds of content or products that are fulfulled by Google or third parties. As long as Google makes the market, it's a natural extension -- and a very nice user experience as well.
And when Google enables individuals to get paid for their uploaded video, or for items they list in Google Base, you can see how Google could change the game on the competition again.
When you make a purchase at the Google Store, you pay with your Google Account:
It works just like buying content from Google Video:
And all your purchase history appears together, regardless of the vendor.
