The paper quoted people familiar with the matter as suggesting that the new payment system, which according to one report could be called Google Wallet, would work in a similar way to PayPal, which was bought by eBay in 2002.
Consumers use the service to buy items online through electronic payment accounts from their credit cards or checking accounts. eBay says its security lies in the fact that banking or credit-card numbers are only divulged to the PayPal service and not to merchants themselves.
The PayPal unit earns its crust by taking a select fee from its transactions.
Observers claim that Google is developing the new service in order to boost its revenue from the online shopping market. The company is currently only able to make money from its search tool and the Froogle shopping service by selling advertisements that appear next to the results.
The reports come two months after Google was thought to have filed an intention to establish a new unit in California called Google Payments Corporation, although there has been no suggestion as to whether the latest rumors are linked to this.
