Google Checkout Precursor Gpay More Ambitious Than Paypal?

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In April of 2006, I wrote about a patent application from Google that described a micropayment system. Since then, we’ve seen Google launch another payment program, Google Checkout, that differs in a number of significant ways from that micropayment system. It’s a pretty simplified way of making payments.

Google just published a new patent application that takes payments much further than the world of online ecommerce. Screen shots from the filing show the name Gpay attached to this system, a name that Eric Schmidt had been using to refer to a payment system during the March Analyst day in 2006.

Google’s CEO insisted that Gpay was “not made to compete with PayPal or to replace existing peer to peer payment systems but that it’s meant to be a new solution to a new problem.”

A Gpay Payment Screen

If this new patent application is any indication of what problem Gpay was intended to solve, it is a much broader payment method than Paypal. The patent is detailed in:

Text message payment
Invented by Ramy Dodin
US Patent Application 20070203836
Published August 30, 2007
Filed: February 28, 2006


A computer-implemented method of effectuating an electronic on-line payment includes receiving at a computer server system a text message from a payor containing a payment request representing a payment amount sent by a payor device operating independently of the computer server system, determining a payment amount associated with the text message and debiting a payor account for an amount corresponding to the amount of the payment request, and crediting an account of a payee that is independent of the computer server system.

The description in the patent provides a look at four different examples of payments that could be made using this system. Interestingly, none of them are online transactions, but rather involve the use of text messages for the purchase of goods or services with a payment made by the person making a purchase, and verification received by the seller.

Payments to vending machines, and to community honor systems (for example, an office lunchroom snack program) are also included within examples in the document.

Examples of the use of GPay

The patent provides a lot of information on how this system would work, and well as giving us some screenshots of the system. It provides information on how an API could be used with the system for even more flexibility in how people make purchases, as well as other innovations. Here’s an image of payment and verification screens:

SMS view of Gpay

This payment system isn’t a competitor for Paypal. Such a comparison would be selling Gpay short.

Will Gpay be something that Google launches, and consumers and merchants adopt? I’d consider using it.

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32 thoughts on “Google Checkout Precursor Gpay More Ambitious Than Paypal?”

  1. Interesting stuff! Let’s hope they take on Paypal, because their fees are crazy and their API sucks ๐Ÿ™‚

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  3. I’m skeptical that even if this shows up on GPhone that it will amount to much. I’d love to see something like this in place, but the backend system that the vendors will need to handle this just doesn’t exist now and the GPay will need something really widespread for this to work.

    I guess we’ll know more hopefully soon!

  4. hmmm. you know its a tricky one… I hope it is more ambitious than paypal which appears to have been left in its orginal form with all its glitches. It works well enough – to a certain extent, but I have a LOT of re-buys from folks who order through paypal, it doesn’t work and they re-order via cc. It’s not my system that throws a spanner in the works, its the continuous reverificatin system paypal seems to have. If Google can make their system more secure, more user friendly, and more reliable, then it is certainly more ambitious, never mind the rest of their apps – if it works the way they say it will… time will tell – I really hope it does. I gave up on paypal a while ago… my 2 cents. And I need a reliable purchase facility. ๐Ÿ™‚

  5. Hi f-lops-y,

    Good to see you. For this to work well, Google can’t be seen with an inferior product. People need to be able to trust it, and it needs to work well. I’m hoping that it does work well, too.

    Hi Felix,

    Some rational skepticism is a good thing. Setting up an infrastructure for a financial system like this would be a massive undertaking, but it could carry with it a potentially massive payout. We don’t know if Google will even follow through with developing the payment system detailed in the patent application. But, I could see them trying.

    Hi Anonymous,

    The patent application does describe this process with SMS text messaging as an example, but stresses in some parts that it could use other methods. I would agree that I would want to see those SMS messages be free, if that is what would be used.

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  9. Hi Phil,

    That’s a great question. I haven’t dug too deeply into the intellectual property owned by Obopay or Clairmail, nor the payment services offered by either. I have seen other mobile payment services described in published patent applications, including the use of mobile phones to pay at vending machines.

    We could assume that before filing for a patent like this, the people writing it, and working upon it would investigate prior art. But we can’t know how much of that they have done for certain. This article from 2004 is interesting:

    Mobile Payment: A Journey Through Existing Procedures and Standardization Initiatives (pdf)

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  13. I fail to see anything surprising or unique about this, but if I end up being compensated like I am currently with Google Checkout I might give it a shot.
    Just because the Google brand is attached to it does not make it newsworthy or good IMO.
    I get way more email asking me what Google Checkout is than customers actually using it.

  14. FYI, Gpay is expected to be integrated into the Gphone. According to a story I just read, it “would simplify commerce for third-party providers by enabling users to pay for their services via short text messages.” That’s a really cool concept…

  15. Obopay does the same thing. Can someone tell me, isn’t Obopay infringing on Paypal’s patent.

    Obopay has several patent pending, all the patent applications look like they are basically the same as Paypals patent. I wonder why Paypal hasn’t sued Obopay and why would companies like Verizon, Citi and MasterCard do business with Obopay if it looks like they are infringing on PayPal patent?

    Any info someone could provide me would be great. thanks.

  16. Hi Elan,

    I noticed a few new patent applications published from Obopay in the past couple of months, too. I didn’t spend the time digging into those too deeply, and comparing them to granted patents from Paypal, or anyone else.

    I suspect that Paypal is paying attention, though.

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  18. Hi Vishnu,

    As far as I can tell, the patent application is still pending.

    I am having trouble this morning getting into the public part of the US Patent Office’s system that lets visitors check to see what the status of a patent may be, but it’s not unusual for a patent to take some significant time from when it is filed to when it is granted.

  19. Hi semfirm,

    I’m not sure that I would want Google to know my spending habits, but I could see them considering using that information about searchers. Good point. ๐Ÿ™‚

  20. One of the coolest blog posts I have read in a long time explained all of the different ways that Google is aggregating data on its searchers. They maintain one of the largest databases in the world. This will add a few fields to that database. LOL.

  21. I have used Google Merchant in the past and was very unsatisfied by the amount of time it took to receive payment for my products. PayPal offers an instant payment checkout, and they also offer free debit cards! To me they can’t be beat! I love PayPal!

  22. Hi Justin,

    There is some overlap in what the different services offer, but there are differences that are worth considering, too. Google Merchant is intended to help someone set up an ecommerce solution where they might not otherwise be able to do so.

    I really like paypal, and think that it’s a great service. I don’t think Google Merchant is intended to be a replacement for it.

  23. Hi aamir,

    GPay never went into use, though a screenshot from the patent filing uses the name and Google’s CEO referred to it by that name in at least one public presentation. Of course, Google has come up with a way of making payments with Google Checkout. We don’t know if Google will build something as broad as GPay, but the patent application showed a hint at possibilities…

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