Google launches Paypal rival in UK

Google has launched its online payment service, Google Checkout, in the UK, challenging Ebay's payment system PayPal.

Shoppers can register their account and shipping details with Google Checkout, which they can use to pay for goods at participating retailers.

The system is expected to boost Google's selling of online ads, by offering cheap order processing for its advertisers.

Google has offered participating retailers free processing until the end of the year, but after then merchants will be charged 1.5% of each transaction amount, plus 15p each time a shopper makes a purchase.

But, for each £1 a retailer spends buying advertising through Google, £10 of orders are processed for free.

Market leader PayPal charges sellers 1.4% -- 3.4% of the transaction, plus 20p for each purchase. PayPal contributed 24% of eBay's $1.72bn revenue in the fourth quarter of 2006.

Checkout was launched in the US last June, but despite the competition, Paypal has continued to grow and now has more than 133m users worldwide. It is still the dominant payment service in the US.

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