Yup, It's Official. Google Checkout Verboten on eBay

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If small merchants can't use Google Checkout on eBay, will they still adopt the fledgling service (which is partially designed to reward AdWords spending)? And how much does the ban hurt (in terms of transaction fees) all by itself? EBay does a whole lotta commerce, after all. Those are the questions on people's minds today, after the yesterday's revelation that eBay (parent to PayPal, of course) has decided to ban the rival service. (Page on acceptable and non-acceptable payment types here.)

There are a lot of complexities to this. What's to keep these small merchants from offering PayPal and Checkout on their sites that are separate from eBay? But, then again, PayPal still offers some functionality (like a shopping cart) that goes beyond what Google is making available. And to what extent was Google interested in courting small merchants, anyway, given that many of the charter stores are big names (and also big Google advertisers, no doubt)?