01:09 PM

Google Offers PayPal Competitor At No Charge

Promotion aims to grab customers from rival online payment service during the busy holiday shopping season.

Google is offering its online payment service at no charge to merchants through next year, apparently sending a message to rival PayPal that you can't beat free.

The promotion replaces Google's previous offer of processing for free $10 of Google Checkout sales for every $1 merchants spend on text ads distributed by the Mountain View, Calif., search engine. The new deal, which runs through Dec. 31, 2007, makes the service free to all merchants, whether or not they spend money on Google ads.

While marketed as a holiday promotion, the latest offer is seen as having less to do with Christmas and more to do with grabbing customers from PayPal. The eBay company has its own promotion, offering merchants free placement on its shopping site if they use links to PayPal Express Checkout. PayPal offers shoppers promotions, such as discounts and free shipping, to lure them to the site.

Online payment services provide registered shoppers a faster way to buy on the Web by enabling them to make purchases from multiple vendors without having to input credit card information on each site. The services are available at no charge to shoppers.

PayPal is the largest online payment service, with nearly 123 million user accounts worldwide. Google is the upstart in the market, having launched its service in June.

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