This summer, Google launched a new service; Google Checkout. This service is fully integrated with Adwords and provides merchants a new way to allow customers to quickly and securely pay for goods and services.
For every $1 you spend in Adwords, you can process $10 worth of sales for free. After that, you pay $2% per transaction with a $0.20 transaction fee. Adwords campaigns are marked with a Google checkout badge, clearly identifying a merchant as a Google Checkout seller. Google actively protects against invalid transactions, and will fight for you if you receive an invalid chargeback.
The future of this program is obvious - this could be easily tied into Google Analytics for website management and tracking. Next, Google could offer a credit card similar to the Paypal card, with preferential terms.
Looking at the official Google blog - merchants already signed up for this program include Starbucks, Jockey, Levis, Dockers, Buy.com, Timberland, and Zales.
Will this service kill Paypal? Many think not. From Techcrunch:
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.
Google also doesn't offer peer-to-peer transactions like Paypal, and Paypal DOES conduct 70% of the financial transactions that occur on Ebay.
But for merchants who use Adwords campaigns, this service will be invaluable. 2% per transaction as opposed to 2.9% per transaction sounds like a deal to me. It also seems that Google's security is far superior to Paypals at present, although I am sure that the competition will cause that to change and quickly.
A key component of Google's marketing messaging for this product is that consumers can enter their information and then with one password and user name, make multiple transactions. But will the public be willing to trust their sensitive information to Google?
From ePublishing Daily:
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?
My take on this issue is that Google and Paypal are targeted differently. Paypal will keep their strong eBay customer base and will continue to appeal to merchants who have both a website and Ebay store. Larger merchants and service merchants who use Google Adwords will flock to Google Checkout in droves. The market is big enough for both to coexist. If Paypal had been serving the non eBay market well, there would be no room for Google.
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