peculation about whether Google Inc. will roll out an electronic payment mechanism for general online commerce has been rampant. The Wall Street Journal reported in February that PayPal, an electronic payments system that handles 24% of all U.S. online transactions, is bracing for stiff competition from Google. But so far, no new mechanism has materialized.

What has emerged, however, looks like a meatier threat to PayPal than a direct competitor, per se. Google, through its recently introduced Google Base, could be poised to throttle Ebay, a monster online auction site that also happens to be PayPal's parent company. Consider this: Google wasn't always a household name, but it handily trounced its competition. Who even remembers Alta Vista and Excite now?

What is Google Base?

Still in Beta form, Google Base is a free online classified service. Its searchable database of user-posted content is available online and offline; content ranges from the molecular structures of proteins to podcasts to goods for sale. Until a few weeks ago, parties to Google Base transactions had to work out their payments in the brick and mortar world.

That was then. Now Google's payment service, Google Accounts, is being tested by a limited number of Google Base sellers. The company expects the group of sellers to expand significantly in the coming months: Soon Google Base users will be able to buy and sell just about anything online.

What are Google Accounts?

Google users have long employed Google Accounts, which Google sets up free of charge, for such online purchases at Google Video and Google's corporate store and subscriptions to Google Earth's satellite mapping service.

To establish a Google Account, users create a login name and password and provide a debit or credit card number for payment. To make purchases, users click on Buy next to a product and then go through the checkout process. Users can link Visa U.S.A., MasterCard International, American Express Co. and Discover Financial Services LLC credit and/or debit cards to Google Accounts. Google Accounts do not accommodate automated clearing house payments. So far, Google Base has not set up person-to-person funds transfer, Ö la PayPal. Transactions flow the same way all card-not-present online transactions do.

What does Google have up its sleeve, anyway?

An anonymous Google stockholder speculated that whatever form Google's payment services take, they will likely apply only to Google-created markets. Even so, Google has been accepting electronic payments from advertisers since its early days, and over the last four years it has billed advertisers over $11.2 billion in 48 different currencies. With its goliath reach, any market Google creates is likely to be substantial. (Heads up, EBay.)

When asked recently if the company has a new electronic payment product in the works, a Google spokesman left much to the imagination. "While we do not have any new products to announce at this time, given our relationship with advertisers and retailers, it is a natural evolution of our business to work with them on ways to make online commerce easier for users," he said.

That leaves the door to electronic payment innovation wide open for Google. And so the rumor mill churns.