Paypal prepares for competition from Google

While Google Chief Executive Eric Schmidt confirmed in press accounts that the company was building a payment service, Mr. Schmidt also denied it would directly compete with PayPal. Mr. Schmidt said Google didn't intend to offer a "person-to-person, stored-value payments system," which many people consider a description of PayPal's service.

Mr. Jordan says he and his team immediately "dissected the wording" of Google's statements. He says he doesn't believe Mr. Schmidt. In the past, Mr. Jordan says, Mr. Schmidt had denied Google would roll out a payments service, only to take it back later. "We took [the comments Mr. Schmidt made] as 'Thou doth protest too much,' " says Mr. Jordan.