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If you’ve ever purchased anything online, chances are you’ve used PayPal or a similar online payment service. These services let small retailers and individuals accept credit card payments for the items they sell. The buyer pays the online payment service directly, typically via credit card; the service then processes the credit card payment and passes the funds on to the seller, typically via an electronic deposit in the seller’s bank account.

For small sellers, online payment services are a necessary part of doing business online. For buyers, they’re simply the way to pay for goods and services offered at many websites and via online auction.

Although the most popular online payment service today is PayPal (owned by eBay, and used in millions of eBay auctions), there’s a new competitor in the market: Google Checkout. That’s right, Google is now in the online payment business, and promises to give PayPal a run for the (electronic) money.