Tech Titans Are Vying to Be Your Pocketbook

Over the last 20 years, big technology companies like Google, Amazon and Apple have revolutionized the way people discover information, find new products and buy goods and services from athletic socks to airline tickets.

Yet they have barely made a dent in changing the way people actually pay for things. Instead, the cash and credit card ecosystem has remained the status quo, even as Silicon Valley behemoths have upended so many other everyday experiences. Most online transactions are still paid for using credit cards.

“Fundamentally, there’s not been a lot of change in the way people have shopped and paid in the last 20 years,” said John J. Donahoe, chief executive of eBay.

And it is with good reason.

“Cash works great,” said Jordan H. McKee, an analyst with the Yankee Group. “Credit cards work great.”

New payment methods could start to gain traction soon, however. Some of the biggest technology companies are now making how they are paid a priority. Having a hand in how people exchange money, they are realizing, has huge potential to deliver profits â€" and valuable data. At stake is not only billions of dollars in revenue, but also the ability to shape how people buy, sell and pay in the future.

So far, if there has been one success story of a big technology company changing the way we pay, it has been Mr. Donahoe’s own company, PayPal, which eBay acquired for $1.5 billion in 2002. Outside of credit cards, it is the most-used payment system on the web outside credit cards, with 110 million active accounts on pace to conduct more than $200 billion in transactions next year. The business generates more than $6 billion annually, and is growing fast.

And PayPal is racing to develop a mobile strategy allowing its technology to be used for in-store purchases.

But Google, Amazon and others are trying to muscle onto PayPal’s turf. Both Google and Amazon companies have developed PayPal competitors that already perform many of the same roles. Apple and Microsoft, for their part, have hundreds of millions of users who have given them credit card information for one service or another.

Google has for the last three years been pushing Google Wallet as an alternative to PayPal. As with PayPal, users can link their credit cards and bank accounts with Wallet. When it comes time to pay for something on the web or on a mobile browser that accepts the service, users need only enter their Wallet user name and password, instead of a full credit card number, expiration date and security code.

And as with PayPal, the goal of Wallet is to take out some of the friction from online commerce.

Google may have a hard time getting many retailers to sign on. While companies like Toys “R” Us, Airbnb and Quiznos are accepting payments through Wallet, others â€" especially big retailers that sell a range of goods â€" are wary of signing on.

“There’s a lot of retailers that are very hesitant to work with Google,” said Mr. McKee, the Yankee Group analyst. “Is Google going to turn whatever they can into competitive information? It’s a red flag for a lot of merchants.”

For example, a company that uses Google Wallet might worry that in doing so, it could be turning over valuable data on customers’ demographics and buying habits. “Walmart holds on to their transaction data very closely,” Mr. McKee said. “But that’s exactly what Google wants.”

Google declined to comment about Wallet.

The company viewed by retailers with even more suspicion than Google is Amazon. Its product, Login and Pay with Amazon, is aimed not so much at the Walmart.coms of the world as it is at the parking garages, restaurants and florists for whom Amazon is less of a competitor.

“We see the payments opportunity as enormous,” said Tom Taylor, a vice president at Amazon who oversees its payment initiatives. “We’re not talking about strict online retail, we’re talking about trillions of dollars.”

Yet while Login and Pay with Amazon has already signed up some marquee partners, like Gogo Inflight, Mr. Taylor acknowledges that Amazon’s founder, Jeffrey P. Bezos, has no reason to celebrate yet. “He’s probably a little disappointed that we haven’t done a bit better,” he said.

Amazon, and others, will most likely have their chance. PayPal is not expected to continue its dominance for long, and just as there are many credit card providers and many banks, so too are there likely to be several companies providing online digital wallets.

“There’s room for many winners,” Mr. Taylor said.

The battle for the market is only just getting started. Only 10 percent of total commerce is done online. The rest still happens in the nonvirtual world.

“Mobile is blurring the lines between e-commerce and bricks and mortar,” Mr. Donahoe of eBay said. “That’s going to completely change how people shop and pay.”

As smartphones enable users to take their digital wallets into brick-and-mortar locations, retailers and payment providers are reassessing how online money and in-store products might interact. Beyond just enabling e-commerce on the go, many smartphones offer in-store purchases with digital wallets like PayPal and Google Wallet, using near field communication, or N.F.C., technology. With the swipe of an Android phone, you can now pay for diapers at CVS through Google Wallet.

PayPal has N.F.C. capability, too, and it, Google and Amazon are at the start of an arms race, each rushing out new features, like loyalty programs, rewards and discounted fees, that they hope will differentiate their service.

Waiting in the wings are companies like Apple, which has the most credit card accounts on file of any company, with more than 575 million. Microsoft has information on troves of such accounts through its Skype and Xbox Live products. And Facebook, with its social graph of more than a billion users, could potentially transform its Credits product, which lets users buy virtual goods and a small range of services on the site, into a formidable competitor, too.

“The market is still such a nascent stage,” Mr. McKee the analyst said. “The foundation is still being laid.”