While Google's entry into the e-payment arena is widely viewed as a shot at PayPal, ArnoldIT.com President Stephen Arnold has a different take. "It wants to transform traditional forms of commerce into Google dollars and create its own virtual economy for consumers and merchants," he said.

Google (Nasdaq: GOOG) shook up the e-payment market last summer with a ballyhooed entry into this space with its Google Checkout service. While many positioned the move as a salvo against eBay (Nasdaq: EBAY) and its PayPal subsidiary, traditional banks may have more to lose if Google is successful as the Internet increasingly reshapes how financial transactions are completed.

"Google never makes a strategic move for one reason; any move has to have a number of potential benefits in order for the company to make it, and that is the case with Google Checkout," said Greg Sterling, founding principal of Sterling Market Intelligence.

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I sort of agree with most of what this article says EXCEPT the part about 'Google Dollars'. Virtual money has been tried by other vendors in the past and hasn't worked out at all.

Even PP at times is bordering on 'virtual money' in that they tie up your money in their account. If you do something they don't like, they at times can and will 'freeze' your PP account and then your money is very virtual as you can't touch it.

Too many people have been burned with things like frozen PP accounts and virtual money companies that don't allow you to spend 'your' money very many places. I doubt that Google would try something that risky.

Carol