PayPal: We’ll Pay You to Pay For You

PayPal wants to handle your money as you do your shopping this holiday season, so much so the online payment company is willing to pay you for the privilege.

That’s right. PayPal has launched a promotional incentive program to encourage online shoppers to use the eBay company’s payment service.

According to PayPal, customers will be eligible to receive cash rebate offers up to $20 when paying with PayPal on qualifying merchant Web sites in North America, including eBay.com The incentives also include free shipping on some brand items.

Market research firm ComScore predicted a big holiday season for e-commerce this year, forecasting total consumer online spending in 2006 to reach approximately $170 billion and estimating that retail e- commerce will break the $100 billion threshold for the first time.

Clearly, PayPal wants a piece. But so do its rivals.

Since the inception of its Google Checkout product last summer, new PayPal competitor Google has offered its own incentives for participating in its payment system.

To help launch the service, Google chose to offer incentives to vendors who were already AdWords advertisers. For each dollar a vendor spent on an AdWords campaign, Google offered 10 times that amount in Google Checkout processing credits.

PayPal’s cash rebate programs will be available to consumers from November 23, 2006, through May 15, 2007. The free shipping promotions will be available beginning November 23, 2006.