Google Checkout launched early this morning and may significantly change the online shopping sector. The system offers low transaction costs for merchants and mediation between buyers and sellers online in exchange for access to what will be a huge amount of data about shopping and sales conversions. There doesn’t appear to be many benefits for buyers in the system.
There are $10 discounts at many participating stores, but in order for me to welcome a new system like this into my life I need features that beat what’s already available.
Not a stored value system like PayPal, Google Checkout is more like a unified shopping identity for buyers who can give their credit card number to just one company (Google) and limit email contact received later from places they shop online. I’m not sure how much I trust Google at all and I’d need a more compelling feature set in order to give them this information (I use GMail because it’s a great system). I hope that stores will offer both PayPal and Google Checkout services, though it seems very unlikely.
The Google Checkout site is in its infancy, with only about 100 stores listed as participating at the program’s inception and few variant URLs that redirect yet to the program page. The program, though high profile in the media, is described on its page almost entirely in terms of its benefits to sellers. The system is limited to sellers in the US, many people were hoping that it would be available in more countries than PayPal is.
AdWords participants will gain extra benefits, with a $10 in sales processed at no cost for every $1 they spend on advertising with Google. Transaction fees are remarkably low, roughly 2/3 of PayPal’s basic rates.
The service’s pricing structure may ultimately be profitable enough for Google, but the major strategy here could be to access shopping data. The biggest question then appears to be whether consumers trust the Google brand enough to look to the company for more than just access to the rest of the world’s data, but as a repository for our own data kept private from a world of online shopping vendors. The benefits over PayPal seem clear for sellers, but whether consumers will react favorably is my question.
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.
They at least have a $10 savings for customers who purchase $20 or more from some of the stores. It is a pretty good deal for right now.
I don’t understand Google’s philosophy here, maybe I’m missing something. The first page asked me to give my credit card information for no apparent reason. WHOAH! duh like thats the first thing I do at any ecommerce site!
Where is the foreplay Google? Aren’t you going to woo me first, show me why this umpteenth feature you provide is a vaulable chunk of the 20 in your fabulous 70/20/10?
Oh right I forgot, this is 2006 you don’t need a reason to give someone your credit card number.
I don’t understand why they would do this either… seems backward to me.
This sounds like Google is trying to be like wal-mart. Google vs. Wal-Mart…
more like Google vs. everyone else.
I do like Google but don’t push it. Don’t try to be everything for everyone. I don’t want a company to have all my information. Do try to be like our current administration.
Also,
I should note as someone who has experience in credit card processing I am
curious to see how they are doing this:
* Third party processing is against Visa/MasterCard regulations. Look at how
PaySystems was shut down not-so-long-ago and you’ll see why. It is a risk
issue.
* Discount rate bases, Interchange, what all credit card merchant’s are paying
are very close to what Google is charging. They can’t pos. have any margin in
their per-transaction costs.
* Who’s name shows up on the consumers credit card statement? Is it Google
or your name?
Dan
oops … Do not try to be like our current administration.
Okay I went a little too far, they do offer a demo and tour, I made the mistake of signing in first – which led me straight to a form asking for all my credit card info. The tour wasn’t so bad, the demo was pretty well made.
But yes, Google is off their rocker can’t they focus on any one thing? I think a survey is in order – how many people out there (not you techcrunch readers) use Google for anything bessides search? Maps may come in a distant 2nd place but this is getting out of hand, they have too much money, and nothing left to do with it. Why can’t they focus half of the $$ they spend on all these BS tools by improving their search so people don’t have to wade through thousands of link farms?
I see what they’re doing… they’re taking on paypal. Which might be okay if they were actually doing something differen’t but this just seems like a big F%&* You to Ebay.
So let the games begin…
Round one… fight!
Who is next? Who else can you compete with Google?
how are they taking on paypal? they’re offering yet another integration and channel opportunity for paypal users who in turn (via paypal) will allow google to tie back into google user bank accounts (on paypal’s side) while still masking transactions to outsiders…elgoog and paypal could (knock on wood) easily hammer out a mutually benefical relationship here, because i do not see the competition between the two as clearly defined (at this point)…
I think you mucked up how much credit you get for using AdWords, for every $1 you spend in AdWords, you get $10 worth of sales that you dont pay transaction fees for. So if you spend $50 in AdWords, then make a $500 sale, you would be saving $2 + 2% = $12 in transaction fees.
I think Google is focusing on one thing: “aquire information” and they needed more than what they get crawling the web.
From the Term of Services:
“You also authorize us to obtain from time to time a credit report and/or to otherwise make credit or other background inquiries as we deem appropriate to evaluate your registration for or continued use of the Service “
Why should google checkout please it customers, its just has to convince sellers to switch from pay pal, once stores start using google checkout, users will follow.
Aslo in response to #7, the reason google doesn’t improve its search is becasue they dont have to. They can make a lot more money by throwing random crap at people and seeing what sticks
Googles problem is that they dont know how to brand. The media gave them a a brandname (gbuy) and they kicked it to the curb. The link below is a prime example that they have no clue about branding.
http://xooglers...s-it-still.html
What is it in for you?
Urm. Low cost transaction costs for sellers? Which means lower prices for buyers.
Soj, you’re right, thanks. Change made.
Sam, I think any price savings “passed on” to me on my relative handful of purchases is likely to have a negligable impact on my life relative to the question of service features and the larger scale financial impact on vendors doing far more transactions that I am as an individual. In other words, I don’t think that cutting transaction costs for vendors by 1/3 is going to impact me as much as whether this new system is a headache to use.
I agree with Pete. People are going to use Google checkout because the merchant they are dealing with uses it. Google has to attract sellers to succeed, not buyers. From the buyer’s perspective, they just have to make sure to do no harm.
Repackaged passports subsidized with ad revenue. Thanks, but I am not uploading my payment data into the googleplex. My form filler works just fine.
So this is what they were talking about for Google Wallet? wow.
The problem with Google Checkout — from a seller’s perspective — is that Google is partly pushing the service with the notion that buyers can hide their email addresses from sellers. I think sellers will (and should) find that onerous.
I’m not worried. Besides, this will just make it easier once they decide on a subscription prices for gmail.
I don’t see why users will use it either. But for the merchants, it’s all about the little icon they get next to their ad…
The markets will be very unforgiving if this thing flops. Its ok to ditch some of the other google labs offshoots, but not this one.
If this flops, look for google to pay a dear price in the markets, and in the brand strength so for that reason, i think they will give it every effort imaginable.
That being said, this launch will severely dillute their brand in search. Are they Ebay? Mapquest? now Paypal?
Next they will launch a site that announces new WEB 2.0 companies
Just wanted to point out a logic problem with your post: To use gmail you dont have to give google your CC number. Would you still use gmail if you had to give them that info?
Here is something odd from their Unacceptable product categories:
Subscriptions to online or offline content (including magazines and newspapers)
“The biggest question then appears to be whether consumers trust the Google brand enough”
Google probably has the best brand in consumer internet. I think this will be a success specifically because Google’s brand is stronger than Paypal’s amongst mainstream users. I’d be very concerned if I worked at Paypal.
I been dying for a worthy competition to Paypal for ages. I don’t see why people wouldn’t flock over to Google. Yes, the features and functionality are limited at the moment, but that can always expand as the system get’s set into place.
Paypal has such terrible customer service and has burned me one too many times. I will gladly leave Paypal behind while giving them the finger on my way out.
This is awesome!
Google – i love you!!!
I’m with Theodore (#21)
Google has lost its identity.
They are doing anything and everything. Does Microsoft come to mind? Is this just the path companies must travel when they have too much money?
Maybe they just want to be able to offer everyweb out there tool in their own way. This way internet users eventually wont ever have to leave the Google brand if they don’t want to.
This system gives an unfair advantage to advertisers who are on Adwords.
More about that on my blog:
Sounds more like Microsoft Passport than Paypal. More grist for the 2.0==GOOGvMSFT crowd.
#29: like MS? i remember using Passport like 6 or 7 years ago or something… and all my information was given to the vendor. i couldn’t stop the vendor from sending offers to both my email and home address. i was utterly disgusted with Passport.
all: i don’t see why all of you are so one sided. this brings in competition for PayPal. maybe not directly but it will spur possibly lower rates and some new innovative ideas over at PayPal to stay above Google Checkout. this is a win win for the consumers because there are more choices out there… and the check out process is streamlined. everyone knows that when Google releases a new product it isn’t full of features because they take user feedback and only work on features that are in high demand to keep their product simple.
I guess the next step is that I give Google my bank routing and account numbers for a Google bill pay.
Then, based on a new algo that factors geo information with average household income, my gmail text, searches, purchasese and monthly expenditures, Google can figure out not only know what I want to buy…but what I can afford to buy. It’s genius!
This really is “organizing the (advertising) world’s information.”
I would definetly use Google Checkout, it rocks, and I love google.
http://www.googleisawesome.com
I’m just waiting to see what people do with the API. Perhaps a Google Checkout widget? Look out RightCart!
Maybe this should have been a beta product!!
Unlike paypal, Google doesnt have the necessary integration with banks (as of this date).
Also, at times I wonder why is Google trying to be a walled-garden co.? What’s the diff between Google and MS then?
Ashish Sinha
http://ashish-s...ha.blogspot.com
Now, what’s the implication here that the Google Account is now tied to credit cards and capable of making financial transactions, given that Google Account passwords are the same as GMail passwords and GMail allows POP3 access, which the POP3 account does not feature any encryption of the user name or password?
Seems like these Google accounts and passwords are passing around the ‘Net in the clear, yet they now hold the power to people’s money.
Am I wrong?
That should read, “…the POP3 protocol does not feature…”
I look forward to this being made available to UK sellers. I am, quite frankly, sick to death of PayPal’s ridiculous fees.
PayPal in itself is bloated. Google is, as always, anything but bloated.
To all the whiny, generic comments about why Google doesn’t just stick to one thing, yadee yada yada: why? Why should they just stick to one thing? They can do what they please, and as long as they’re doing it well (which they clearly are), I see no problem with it.
Why is it that when a company reaches a certain size, people (well, tech people) stop trusting it?
I trust Google with my information. Other than paranoia, there’s no reason not to.
Chill out.
This will be a mild success (read disappointment) for google.
1) w/ the gov’t trying to find out what cereal you eat in the morning, why would i want one company (google) to know everything about me. my searches, my purchases, my credit history, etc. et.c
i will not sign on just for that fact alone. google is the new microsoft. be afraid. be very afraid.
2) there is a contradiction here. this service is to help “people to people” transactions? yet, it is tied to Adsense. The majority of Adsense merchants are big companies. The reason paypal took off is because of ebay. Ebay is all about small transactions between people. Paypal works perfectly for that. This Google Checkout will appeal to large merchants…so why would consumers who have Paypal accounts switch? It’s two different levels of transactions.
try finding a small merchant in any of your searches. it’s impossible unless you type in a specific store name. small fry cannot outbid the large merchants for Adsense ranking. So essentially, this is PayPal for big time merchants……which is what credit cards are for.
“The majority of Adsense merchants are big companies.”
I don’t think so.
#12, GBuy would have been a very very very bad name. “Google Buy” would have been just a bit better but still a horrible name.
If anything I’m happy they went for Google + . So perhaps they’re not that stupid when it comes to branding… Still, the G+something or Google + something should settle for “one or the other”.
Google has to do this. They’re laying the groundwork to move past pay-per-click and pay-per-impression, and move to a model where they place ads based on the actual sales generated. The good thing is that the ads they schedule may eventually become ads I’d actually like to see.
I’m not sure why people are criticizing Google for this move. It seems a bit close-minded to criticize them based on what we see now because we only see a small part of a much bigger plan Google has. We can only speculate.
And why does Google have to focus on one thing? It’s like saying
“Oh here’s another way to increase our revenue!, but damn it, we only have to focus on one thing because we are only a search engine.”
Google Checkout, as is today (first day released to the public), probably isn’t much to talk about, and doesn’t come close to Paypal yet. But we need to think of the impact in the long term.
That’s why you critics aren’t CEOs….
Just goes to show you that what was old is new again.
I remember Microsoft rolled basically this exact thing out about about a decade ago and called it the MS Wallet, IIRC. It was hooked to that Passport thing… yeah, I think that’s it. And, as I rewind the tape in my way-back machine (it pre-dates TiVo) I think I remember MS Wallet slinking off under the fridge of obscurity for (at least) a couple of reasons:
1) Microsoft was near the height of their ability to exploit the Windows platform. Windows was everywhere, Linux was then an obscure geek tinker toy. The DOJ was snooping and sniffing around the campus, and the lock-in MS had rather rapidly created had struck a cacophonous chord in everyone in the tech world. And the smell of fear and loathing was everwhere. I think I’m catching a wiff of that again, but from a more southerly direction this time.
2) Gates had the audacity to announce that MS using the Wallet, MS would merely take a penny or two of every e-commerce transaction on the Internet. And every merchant on the planet would thank him for it.
And today? How’s this compare? Platforms are now ecosystems, but lock-in by any other name is still the same.
Checkout? Spreadsheets? Gmail? Calendar? Desktop? Products X, Y and Z? It’s pretty easy to see they are simply building up a deep, detailed and connected cache of data all about you, my fellow Googleheads. Coincidence? I think not. Beneovelence? Not from a public, for-profit company with this much market at stake.
Google is to today what Microsoft was to the late 90s. But the difference here – and this is key – is Google is smart enough to grease the hinges on the gate prior to closing it behind you.
Thomas Hillard
Here’s my list of what I use Google for on a daily to semi-daily basis:
Gmail
Search
Homepage (custom)
Google Finance (Stocks)
Google Desktop
Google Spreadsheets
Google Maps
If it’s cheap and easy to implement as a a seller. If it lowers sales transaction cost. If it is trustworthy (Google brand). Then it will succeed. Sellers will use it. Buyers will have to use it if they want to buy a product from that Seller.
1. Buyers don’t really care about checkout systems and don’t search for products on that basis – however at checkout time a household name like Google will help allay any trust fears. (I’d guess that this is why they went with Google Checkout vs GBuy). The right move? – yet to be seen.
2. As for buyer benefits – the one account(single sign on for Gmail & Checkout) for all purchases is a benefit that buyers will appreciate and I suspect most consumers will be happy with trusting the Google brand.
Personally I’d use it if I can get it New Zealand – but alas Google Checkout is US only for now (p.s. even PayPal after all these years is still not available in $NZ)
#38 mamamia: wow, you ARE out of the loop.
#42: Bravo!
and to the ones stating that Google is collecting information from each and every single one of us…. well, what’s new? this is been done for many years by numerous companies. as for just handing the collected personal information over the the feds without a loud fight…. i think that was answered for all of us when the US Government tried to pull information from Google a few months ago. and say for instance the US Government “does” attain your personal information…. So What! if you’re not terrorists or a pedophile then you have nothing to worry about.
It’s interesting…some prominent bloggers have turned anti-google while the users still mostly cherish them.
This is US-only. Any word on when they are expanding?
Google will need buyers and sellers. If you look at Yahoo Direct!(that failed) you will see they had plenty of people selling products, but no one buying it. If you don’t have enough people buying products then merchants won’t use or will stop using google checkout.
I still wish they’d lower their transaction costs since the data in itself is valuable to them.
pacificdave: You’re right, privacy in this electronic world is nothing more than a naive fiction. Lots of folks have been collecting lots if interesting info about all of us for a long time (Visa/MC, for example).
But the thing I find fascinating (and admire) is how deft Google is at getting many to accept and adore some concepts MS couldn’t give away just a few years ago. I think it’s more than admiration. It’s awe, really.
But will Checkout make big dollars for Google and actual sense for world at large? Does anyone on the buy side really care? I dunno, but I doubt it.
Bottom line – I trust Google no more or no less than any other company who has my credit card number. Neither should you.