This tells me one of two things is happening…
1. Google Checkout is not growing as fast as Google would like and needs a jumpstart
2. Google Checkout is growing just fine, but they want to send another shot across PayPal’s bow
Either way, it’s really a great move by Google. Skype (also owned by eBay) dropped call charges until the end of the year and their user base grew like crazy. With this move, Google will be able to attract a lot of new merchants, interested in saving on credit card processing fees – and just in time for the busy holiday shopping season too!
Google can easily afford to drop the fees in exchange for bringing on new merchants, who’ll also be introduced to Google’s other product offerings. The money lost in fees, can simply come out of Google’s marketing budget.