• by June 22, 2005

Google says it's building an online payment system that could eventually become a competitor to eBay's PayPal.

However, Google CEO Eric Schmidt says the online payment system will be different than PayPal. For example, Google's online payment product won't have the same stored value payments system as PayPal, which stores funds for a short time under its control. Schmidt was very short on details.

Under its current system, Google accepts payments from advertisers and sends money to AdSense customers. Those customers receive payments when Google ads are displayed on their sites. Google advertisers pay each time an Internet surfer clicks on an ad that's generated through the company's AdWords program.

Earlier this year, Google said it was testing a third-party electronic funds transfer service to send payments to Web sites that carry Google ads.