ePublishingDaily

Far from being an instant PayPal killer, Google Checkout - not the rumoured GBuy - which received massive coverage recently upon its launch is aimed primarily at shoring up its AdWords business.

And in that sense it’s a clear winner.

Cashing in on its trustworthy status amongst the many millions of web users, Google will store your details (including your credit card) so that making a purchase via Checkout becomes as simple as possible.

For me, only a company such as Google can have another go at asking for your trust in holding such personal details. Where others have failed, Google will succeed if they stick to their corporate motto.

So the questions is, is Google Checkout a real competitive threat to PayPal?

PayPal (started in 1998 and now with in excess of 100 million users) has many pluses on it’s side. Individuals can send payments to anyone with an email address (peer to peer) and it can also be used to request money - a pseudo-invoicing system. Checkout does not have these facilities.

PayPal has dominated the online payment scene for a number of years now but it has clearly been directing itself into the auction end of the market - nearly 70% of all PayPal transactions today come via eBay. Fair enough, eBay owns PayPal.

I’m not into eBay, but ever since the purchase you had to know that they would push as hard as possible to integrate the two. Outside of eBay, PayPal’s branding is not as strong. Yes, the vast majority of info products being sold today offers PayPal as an option, but you rarely see the big name stores offering it. In other words, the PayPal brand is stagnant.

Interestingly, eBay has recently banned Checkout. This should not really surprise anybody as it’s only a few weeks old - but it does make great copy - eg: eBay is running scared. And who knows … they may just be.

As stated above, the one thing that weakens Google Checkout - at the moment - is that you are unable to do peer to peer transactions - which PayPal allows you to do. That is a big minus for me and I’m hoping that that feature will naturally evolve over time.

Now a bit of commentary from across the Web.

Google Checkout is faster and easier for consumers to use than PayPal. “As we see it, this speaks volumes about Google product development skills and PayPal’s lack of innovation.
(Technology Review)

I tend to agree to a point. PayPal does offer a good variety of features but nothing beats a quick sale process and if that is Google’s basic platform then they’ll win.

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Checkout will work in conjunction with AdWords, so that consumers who visit a merchant’s site through a sponsored link will have the option of going to a separate, checkout site. The goal, company executives say, is to “automate the advertiser click cycle,” which means that instead of simply handing you off to a merchant when you click through to an AdWord link, a virtual rep from Google will tag along and offer to charge your purchase if you decide to buy. That will speed up transactions which translates into more money for merchants and, of course, for Google. (source: EnterpriseWeb2.0)

And that’s where Checkout wins out big. AdWords is a massive advertising system used by many businesses - big and small. The lure of turning that click-thru into a sale made more simplier will attract more into AdWords, thus no dout pushing up bidding prices. Google wins.

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The New York Times writes…

Google will waive some or all of the transaction fees for companies that buy advertising from it. That may give the service a leg up on competitors like PayPal and several smaller companies that help online merchants accept credit cards.

And when before I said Checkout wins big, for AdWords advertisers this is the biggest win.

For every $1 a company spends on search advertising via AdWords, Google will waive the fees on $10 worth of purchases. There’s some might potential savings to be had there. Merchants using AdWords are the big winners with this one.

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But far from being only a beaut of a concept for AdWords users…

if you don’t advertise with AdWords at all, you’ll only be charged 2% plus $.20 per transaction. No monthly fees. (Taragana)

2% and .20 cents!!! Awesome! So even if you don’t use AdWords it still beats PayPal on fees. This is sounding better and better as we go along.

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Chris Garrett from Performancing is not 100% impressed with Checkout…

What I was hoping for was a real alternative to paypal, preferably with the ability to use Adsense income to pay for Adwords without conversion into local currency. Maybe even micropayments.

Now that would make total sense and don’t forget that Google are a smart bunch. You wouldn’t want them to show their whole hand just yet, would ya. I can easily see Google in the future allowing AdSense earnings to be used for AdWords spend - it just makes total sense.

But for the info product marketer using AdWords, Chris gives it a thumbs up…

If you want to sell digital products off your blog and you participate in Adwords advertising it will be worth giving the service a look over, transaction fees can take a bite out of your profits.

Yes. Yes. and Yes. That’s exactly what ePubDaily is all about. Bloggers creating eProducts and using AdWords to bring in the customers. Google Checkout: Checkmate! Well at least for serious info product developers.

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SearchEnginesWatch say:

For now, using Google Checkout will be a no-brainer for smaller merchants with limited budgets, as the program provides a valuable service for very low cost and offers additional benefits for advertisers. More established merchants may well want to wait to see how successful the program becomes before jumping in, keeping a close eye on the positioning of competitors’ ads who are using Checkout to see if their ads are getting a boost from consumers clicking through more frequently.

Definately a hit for small merchants. But it still depends on consumers taking it up. Will they be prepared to give away more personal information to Google. My view is that they will. Google already holds so much personal information from their wide variety of offerings and they are clearly playing on their trust factor they have with users to gain acceptance to hold even more information. I wonder how long it will take them to get 100 million users to sign on?

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Welcome to Smuggle Me asks…

Will they be any better than paypal at not freezing your account and not paying you your money? … They may not be perfect, but I think they’ll be better.

For merchants, PayPal has had a chequered history with chargebacks. Many would not believe how easy it is to win a bid on eBay, receive the goods and then make a chargeback claim. The merchant usually looses out.

Let’s hope Google has learnt a little from that and will make it fairer for merchants not to get easily scammed. Although as we’ve seen with click fraud Google seems to be struggling to keep on top of it. In this instance, the stakes go much more higher. It’s one thing to have 10% or so of your click-thrus fraudulent. It’s another to be scammed out of your stock. So Google will have to be on their toes with this one.

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The highly popular TechCrunch doesn’t really think much of the offering… …

I like having a store of money in my PayPal account and automating monthly subscription payments. Neither of these appear to be an option with Google Checkout. I don’t know why I’d use Google Checkout over PayPal if I had a choice, and if I don’t have a choice I’m liable to resent it. Maybe someday all this data on my shopping habits will be used to better serve ads I’m interested in via Minority Report type billboards, Google style. I don’t know.

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C/Net Editors say:

Overall, Google Checkout offers an easier alternative to shopping with multiple logins across multiple Web sites. However, if you’re nervous about entrusting your shopping habits to any company’s servers, you may want to pass. Nevertheless, we appreciate Google’s detailed privacy policy, its merchant rankings, and its fraud protection.

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My Final Thoughts: It seems a very interesting move by Google. Not what I really expected when we first heard the rumours all those months back. And in fact, it seems like a very smart business move on Google’s part to further entrench AdWords as the leader in Pay Per Click Advertising. AdWorders will love it.

My recommendation: Give Google Checkout a try, especially if you’re using AdWords - the incentives are just too good to pass up. Also, if you don’t use AdWords I’d say give it a go. The fees beat PayPal.

Also keep in mind the love/hate that many have of both Google and PayPal (especially PayPal). Hence why this thorough overview and many link outs. Take some time to make up your own mind.

But at the end of the day, even though you will be paying more with PayPal, PayPal have had a good headstart and with more than 100 million account holders as a infomation publisher you know that your potential buyer will trust using PayPal. Google’s Checkout may appear to be better, but they have to build trust and reliability over time … even if they are Google.

But then what do I care at the moment. It seems (and very frustratingly) that Google Checkout is only available to US users.

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More to Read on the Google Checkout Launch…

Official Google Blog Announcement
Take a tour of Google Checkout
Google’s Information for Sellers
5 Reasons Why Google Checkout Is the Beginning of the End
Google Checkout Supports Its Core Search Business
How do I add “buy now” buttons with Google Checkout?
Google Checkout: no PayPal killer
Google Checkout Steps Up To the Plate
Google Checkout released: Only in America

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Note: Typical. Somebody has aready registered the domain gbuysucks.com (6 Feb 2006) and GoogleCheckoutSucks.com (30 May 2006).