Will Google Wallet Force PayPal to Accelerate Global Expansion?

The announcement by the WSJ that Google is prepping a payment service is big news in the ecommerce world and, I think, good news for consumers.

According to the article, “Exact details of the search company’s planned service are not known. But the knowledgeable people say it could have similarities with PayPal, which allows consumers to pay for purchases on Web sites by funding electronic-payment accounts from their credit cards or checking accounts. Some consumers like PayPal for the security it offers, since it allows them to share their banking or credit-card numbers only with PayPal without having to divulge the information to merchants.”

PayPal is a great service. My company uses it and it has allowed us to accept payments from all over the world. My only concern has been the flood of PayPal phishing spam and what effect it is having on user trust and behavior.

But now we have Google getting into the game, with a service possibly called Google Wallet. At the very least I believe that Google Wallet will pressure eBay to rethink its global expansion strategy for PayPal. Currently, PayPal follows in the footsteps of eBay. When eBay launches a country Web site, it’s just a matter of time before PayPal supports that market.

However, PayPal might be wise in expanding into markets ahead of eBay because Google has a track record of “going global” at a blistering pace. eBay knows well, after ceding Japan to Yahoo! a few years back, how being a late entrant into a market can hurt. And yet Google is going to face its share of roadblocks along the way. The reason PayPal has gone global relatively slowly is not so much technical but legal. PayPal needs to forge partnerships with local banks and get regulatory approval in these markets before it can enter, and you can imagine the time and lobbying involved; I’ve heard that this process alone can take up to 18 months per market. There is still no PayPal China.

I would imagine that Google is going to have to do jump through the very same hoops that PayPal has jumped through, unless it is taking a different approach altogether.

Regardless, I’m glad to see Google getting into ecommerce in a global way. It will push PayPal to be even better, most likely keep processing fees low, and keep the folks at Visa, MasterCard, et al at bay.

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Author: John Yunker

John co-founded Byte Level Research in 2000 and is author of The Web Globalization Report Card. He also co-founder of Ashland Creek Press.

1 thought on “Will Google Wallet Force PayPal to Accelerate Global Expansion?”

  1. Paypal is anything but great. As a consumer, they froze my account for NO reason at all with my 55 dollars in it. I called them and I got yelled at and slam by the phone. Maybe its because Im only one and you have a company. And I am not the only person who got rip-off by this so called great service of yours. I must urge you to rethink the word “great service”. I cannot wait for google to squash this crap of a company.

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