Its now official. Most banks haven’t figured out how or why they should worry about Paypal, and now Google is here.

Help Center: How do I accept payments through Google?

This feature allows individuals based in the United States to sell commercial items on Google Base and accept payments for these sales through Google.

So lets consider the consequences here … Purchaser can pay seller through Google. But the actual money is coming out of the purchasers credit card. So in effect Google is in competition here with the payment networks, the card acquirers. The card issuers have to ensure they work with this new payment acquirer.

Charge the buyer’s credit card: Once you’ve determined you can fulfill the order, charge the buyer’s credit card by clicking Charge beside the appropriate order in your inbox.

Google are an intermediary. However there is a twist compared to normal payments in that they are hanging on to the sellers money, and doing a “payout” within 2 days. Most payments networks send the money straight through.

Payouts will be initiated within two business days if:

• You’ve already specified a valid bank account to receive your payouts.
• You’ve successfully charged an order.
• You haven’t reached your monthly payout limit.

Relevance to Bankwatch:
At this stage this is a very tentative foot into the payments business. Google are clearly not experts in this, and there is lots of “small print”. However they will learn fast. For example, I would expect the “option” to retain your balance with Google is an attractive thought that I would consider if I was Google. This is what worries me as I watch the evolving competition.