Google Checkout was released to the public earlier today. Google Checkout is basically Google’s equivalent of Paypal. In Google’s own words:
For merchants, Google Checkout is a new way to process sales. It works with Google AdWords to make it easy for shoppers to find you and buy from you.
You can get a quick summary of Google Checkout from the Official Google Blog.
Unfortunately the program is only available to the US at the moment. Perhaps one day a major company can beta-test their new product in Australia? But I understand the logic.. just can’t wait!
One key factor when it comes to online merchant accounts is how much information a buyer needs to put in before they can make a purchase. This was what held Paypal back for so long. Originally with Paypal, buyers had to sign up as Paypal members before they could make a purchase. Today they have the option of ‘no signup required’.
On first glance it seems like Google Checkout has no ‘no signup required’ option - meaning every single person who buys something will need a Google Account. In the long term this could work out good because it could result in buyers not having to re-enter shipping and credit card details on every site they go to. Sure, Paypal has similar options but the implementation of their API isn’t the cleanest resulting in merchants often handling the shipping address and rates themselves (eg. osCommerce).
If the Google API allows consumers to sign up for a Google Account from within a merchant’s online store then they will be able to penetrate the market very quickly indeed.
I think the major advantage Google Checkout has over Paypal is Google is a known and trusted brand. While Paypal has made up huge ground since being purchased by eBay, I doubt they’ll ever enjoy the market penetration that Google does.
A fantastic marketing tactic Google are using is the fact that for every $1 you spend on Adwords, you can process $10 worth of transactions through Google Checkout. That’s a pretty sweet deal, especially for merchants who sell high-ticket items. Yes, that $10,000 web design job can be paid via credit card without hitting your bottom line too much!
A final factor to consider is speed. Paypal is notoriously slow. It’s slow to even browse their help files which is extremely frustrating for developers. It may be a case of their popularity/traffic slowing them down, but Google seems to handle traffic well. So if Google can maintain their speed with Google Checkout they’ll be well on their way to the top.
Google has come up with what looks to be a very formidable competitor to Paypal. Once they go international it shouldn’t take them long to be on terms with Paypal. However the process to go international could take quite a while yet (years?). Either way new competition is always welcomed and at the end of the day it’s both the merchants and consumers who win.