This week has seen plenty of conjecture about that online payment service Google was about to launch. Well, now the service is here and it’s not the PayPal killer many expected. Our own Jeremy stood apart from the crowd by telling you so weeks ago.
The new service, called Google Checkout, is meant to give businesses an easy way to charge for their wares, and to relieve customers from the hassle of keeping track of multiple accounts with online merchants. As a shopper, you’ll need a Google account to use the Checkout service, and the signup asks for your address, phone number, and the usual details on a major credit card. You only have to do this once, and then you’re ready to check out online purchases from stores like Starbucks, Buy.com, and Tweeter with just a couple of clicks. The appeal of Google Checkout for us punters is its simplicity, along with having a single interface across multiple stores.
For the vendor, Google takes a smaller cut of payments than eBay’s PayPal does. PayPal starts at US$0.30 plus 2.9 percent of the total payment, but Google lowballs that with $0.20 and 2 percent, respectively. In addition, merchants that use AdWords get a break on these fees to the tune of ten times the amount spent on advertising. In other words, spend $100 on AdWords campaigns and get up to $1,000 of your Checkout fees refunded, making the service essentially free for some sellers.
If that wasn’t enough incentive for businesses to open a Checkout account, there’s one more perk: if you’re a registered Checkout merchant, your AdWords text ads will get a spiffy little shopping cart icon next to them, which makes your ads stand out a bit from cart-less competition. Of course, if this becomes common practice, it will work the other way around as most ads have little carts and the ones that don’t might attract more eyeballs.
But even then, the non-carted ads will be missing a badge of honor, or so Google hopes. When you can entrust your credit card information to Google—and who doesn’t trust Google?—with clearly defined refund policies and dispute resolution procedures, why would you want to use a payment system cobbled together in some dodgy e-tailer’s garage and hand over credit card information to companies you never heard of before clicking on a Google ad?
<!– Buy early, buy often. –>
Google may be trying to displace PayPal for small business use (and maybe even get into larger accounts than PayPal ever did) but let’s be clear: this is not going to be a person-to-person payment system anytime soon. There’s no simple way to send money to other individuals who aren’t running online businesses, and certainly nothing close to the convenience of PayPal’s payments to anybody with an e-mail address. The recipient must be running a website with the appropriate code to link into Checkout services, and you’re not going to get great-uncle Bert to set up a website just so you can send him cash to finance his
Viagra Lipitor habit.
And while Checkout is tightly integrated with AdWords and even Analytics, there are no ties at all to Google Base or Froogle at this point. Searches in those services that return listings from Checkout partner stores don’t have the little shopping cart icons anywhere in sight, though you can still checkout through the Google system if you entered the store from Froogle, or just typed in the store URL by hand.
All things considered, this is simply the Google Wallet that the company’s management has been discussing publicly for a very long time. The official word all along has been that there will be no person-to-person or micropayment solution, and that Google was not intending to compete directly with PayPal. The company has delivered on its promises, and still many popular news sources are hyping the future of Google Checkout as the definitive PayPal killer. Here at the Orbiting HQ, we think that this is pretty close to the final form of the service, and eBay can put down that nuclear warhead it had planned to deploy in its defense.
Should you feel like giving the Checkout process a look from the consumer side, several of the initial partner stores are running a $10 rebate on $20 minimum purchase promotion. So hurry up and get your eCost discount before that company goes out of business. 😛