Google Checkout or PayPal?

Google Checkout is Google’s online payment service that enhances the shopping experience by providing a secure online payment channel to buyers.
How does it work for buyers?
To avail this online-payment service, a buyer has to register with Google Checkout by entering the shipping details and the details of one or more credit or debit cards the buyer intends to use for payments. If a buyer has registered multiple cards, they have the option of selecting the card to which the payments have to be credited, at the time of payment. Once registered, buyers can log on using their account and shop online across all the online stores registered with Google Checkout.
What’s in it for sellers?
By registering with Google Checkout, sellers can join the string of online stores (like Timberland, Jockey, Dick's Sporting Goods, Starbucks Store, GNC, Zales, Dockers Tweeter, etc.) that buyers can browse through and shop at, with a single login. Once the buyer tumbles upon a seller’s store and makes a purchase, the seller can use Checkout to charge the buyer’s credit or debit accounts, process their purchase orders, and track the status of the transactions.
Moreover, as Checkout is linked with Google AdWords, sellers can optionally choose to leverage Google AdWords to advertise their online business and draw more customers. The Google-Checkout badges on the sellers AdWords ads can help buyers locate the seller while they search the Internet for specific keywords.
As an introductory offer, sellers can avail the payment service for free till 31st December 2007. That is, they can accept online payments without having to pay any service charges or transaction fees. Post 31st, sellers will have to pay a 2-percent premium and an additional processing fee of 20 cents for every transaction.
Supported Modes of payment
Google Checkout supports payments using the following credit and debit cards:

1. VISA
2. MasterCard
3. American Express
4. Discover

Availability
The Google Checkout service is currently available to all buyers and sellers in U.S. and U.K. Although buyers from a few other nations can avail the service, the must be made in U.S. dollars or in Pounds Sterling. The service will shortly be rolled out to sellers and buyers in other countries.
The sellers in the U.S. who wish to avail the service must have a valid U.S. address, hold a bank account in the U.S., and have one of the following:

1. Social Security number and a valid credit card
2. Federal Tax ID/Employer Identification Number (EIN)
   

Google Checkout vs. PayPal
Although there was much speculation that Google Checkout was being built to take on PayPal, the features and the target users of Google Checkout are limited compared to those of PayPal.