Is GBUY a Threat to Paypal?

Is Google really trying to compete with Paypal? Eric Schmidt (CEO) of Google denies that Google is trying to compete with Paypal, however, according to Wall Street Journal, President of Paypal Jeff Jordan doesn't believe what Eric is saying. According to Jordan, Eric had said in the past that Google would not introduce online payment services, and yet Eric announced that they are working on the online payment service called GBUY, and has been offering the service as part of their beta testing.
Paypal.com was founded in 1998 and grew rapidly over the years. Paypal was later bought by eBay in 2002, and have helped both eBay and Paypal to a greater extent. Paypal currently has more than 80 millions customers.

What started as a search engine, Google now has been rolling out new products and services. I think Google is taking an advantage of its solid base of customers/traffic/users when it rolls out new services. They do not have to publicly announce their services, thus saving extra costs. Paypal is also expanding is horizon. Paypal was used to be used by small businesses, and individuals, but now even bigger companies are using the service. I think this is what Google is also planning to come up with their online payment service to get a piece of a pie.

So should Paypal be worried? I guess they should. You never know what Google comes up with. Please note that they have one of the largest numbers of PHDs employed...