PayPal and Google Checkout Show the Way for Banks' Payment Operations

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ID Number: G00145030

This research is provided for historical perspective;
portions of this document may not reflect current conditions.

29 December 2006

Christophe Uzureau Alistair Newton

PayPal and Google will affect banks' payment operations through competitive pricing models for merchants and the convenience of services for consumers. But they are also showing the way for the evolution of banks' payment operations.

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Table of Contents

Analysis

1.0

Overview

2.0

Focus of Report

3.0

Analysis

3.1

New Players Add More to Payments

3.2

The Size of the Threat to Banks

3.3

PayPal's New Maturity Phase

3.3.1		New Payment Instruments
3.3.2		New Pricing and Processing Models — Business Intelligence Is the Key
3.3.3		Not All Good News for PayPal
3.3.4		Welcome to the eBay Family

3.4

Google Checkout — Advertise With Google, Search With Google, Pay With Google

3.5

Building a New Payment Market Is Not Smooth Sailing

3.6

New Payment Instruments Won't Suffice

3.6.1

Damage to Banks' Payment Relationships and Beyond

3.6.2

Community Payment Services

3.6.2.1		Trading Communities
3.6.2.2		Migrant/Traveling Workers/Students

3.7

How Should Banks Respond?

3.7.1		Banks Have the Edge in Account Services
3.7.2		New Collaborative Models
3.7.3		Dealing With Operational Silos Is a Priority

4.0

Recommendations

Recommended Reading

List of Tables

	Table 1.	Pricing Scenario — Comparisons of Merchant Payment Fees for AdWords and Non-AdWords Merchants (Based on 100 Transactions of $100 Each, Totaling $10,000 for Month n+1)

List of Figures

	Figure 1.	PayPal vs. Leading Retail Banks

Payment Services
Payments
Banking Business Strategies

© 2006 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

Resource Id: 500001