I would think Google was going to release the new Google Checkout as "GBuy" but they changed the name to Google Checkout instead.  According to the New York Times "The company is introducing Google Checkout today, a service that will allow users to make purchases from online stores using payment and shipping information they keep on file with Google."

Google’s new service enabling consumers to make purchases from online stores using payment and shipping information they keep on file with Google, officially launched with the name of Google Checkout, rather than the rumored GBuy.

Google Checkout, as reported by The New York Times, is priced at rates which undercut current credit card processing fees:

Google is charging merchants 20 cents plus 2 percent of the purchase price to process card transactions, less than most businesses pay for credit card processing. Banking industry executives say that credit card processors typically pay MasterCard and Visa a fee of 30 cents and 1.95 percent for every purchase, so Google will be subsidizing many transactions

Sounds like a good deal if you do a lot of transactions.

"Yahoo, the other main seller of advertising on search results, recently announced an alliance with eBay that among other things will encourage Yahoo advertisers to use PayPal for payment processing. PayPal will also be promoted as the online wallet for use on Yahoo services. Both companies declined to give financial details of the deal."

You can see the lines being drawn - the Yahoo Ebay partnership was a response, I think, to Google Checkout.

"For merchants, one concern is whether Google’s system, which is unfamiliar to users, will reduce the number of people who complete purchases on their sites, a measure known as the conversion rate."

I don’t think it’s going to be that much of a problem because it’s got the big "G" behind it.  The Google brand is so well known that people will feel more comfortable using Google Checkout than some of the other payment processors out there now.

BTW, one added benifit is the tie in to conversion metrics - Google now controls the search listing, the search behavior, via the Google Toolbar, and the Search Purchase - that’s most of the key points you’d want to track to figure out ROI.