Google has denied that its GBuy online payment system is designed to compete with PayPal. 

The service, believed to launch on 28 June, has been given the codename GBuy but does not have an official name, according to Google. 

Eric Schmidt, chief executive at the search giant, denied that the service was designed to compete directly with eBay-owned PayPal. 

"It's not like PayPal at all," Schmidt told Reuters. "It makes no sense for us to go into businesses that are occupied by existing leaders. We want to solve new problems in the payments space."

Schmidt explained that that the system would not be aimed at general consumers, but at advertisers.

But analyst firm RBC Capital Markets said that the service could expand over time to include consumer-to-consumer transactions, putting it firmly in PayPal's territory.