Google is launching its payment system, Google Checkout, in the UK.

The service is aimed at merchants rather than for person to person payments and will compete with PayPal and traditional credit and debit cards. The service has been available in the US since June 2006.

Customers use their Google ID - from signing up to Gmail or other services. In the US merchants using the system get a discount when buying Google AdWords - for every £1 spent on AdWords you can process £10 in payments for free. The Checkout logo will also appear next to ads from merchants using the system.

Punters get free fraud protection.

The move gives Google an interest in every stage of online shopping - from search to advertising and payment. ®

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