Late last year Google fired a few shots at PayPal when they waived merchant fees at Google Checkout for the rest of the year. Today they hit hard, using their biggest gun to promote the service: the Google homepage.
Google has added a link to Google Checkout along with a $10 coupon to use with Google Checkout merchants. Hitwise predicts we’ll see a big spike in Google Checkout traffic. I agree.
Small merchants overwhelmingly use PayPal to take credit card payments (we use them on CrunchBoard). But Google’s Checkout product is superior in a lot of ways. And the fact that they are promoting it on the Google home page and in search results is a real competitive advantage. Whether it is enough to overcome PayPal’s own big gun – their lock on eBay – isn’t obvious. But everyone loves a good fight, and the word is Checkout has more interesting stuff coming.
I’ve really been losing interest in Google over the past year. They seem to hype a lot of stuff, but it never really meets expectations. Google Base definitely isn’t what it was supposed to be – eBay is still alive and well. I’m not sure that Google Checkout will be any different.
PayPal’s success is directly tied in with eBay, and I’m sure eBay will be pretty hostile towards users using Google Checkout. Google’s advantage is having a ton of traffic, which might drive users to the Checkout service… eBay’s advantage is stopping those users from using Google Checkout.
I wouldn’t call for success or failure just yet – it could go either way.
Sadly, my only experience with Google Checkout was a poor one. I ordered a CD-set through PBS, who used Google Checkout, which went out of stock shortly after I ordered it. I never heard anything from PBS (no order confirmation or anything), so contacted them. They said they never got my order. I contacted Google Checkout who said they had nothing to do with it and to contact PBS–who could only be contacted, according to them, via the “Contact Merchant” email form. Meanwhile, my account on Google Checkout listed the order as complete and my credit card had a temporary authorization on it. Eventually, after a lot of hassle and going back and forth I was able to get someone on the phone at PBS who got the order canceled. (This was in early December, by the way.)
All in all, though, it was a bad experience that reflected poorly on Google Checkout. I have never had any problems with PayPal, however, in 3 years. And PayPal’s phone support has been quite good–on two occasions after being scammed by people selling websites they didn’t actually own, I was able to get my money back despite PayPal’s claim of not offering protection on digital goods.
Wonder why the Checkout page doesn’t have the “beta” label in it, unlike everything else Google launches? Because it would be suicide.
Online Payments is not your usual “pretty ajax app”. You want a top-notch fraud protection system in place, both from a tech and a human standpoint, you want fast and efficient sales support, and many other things that a “web app” doesn’t deliver by itself.
I’m not saying Google won’t be able to do a good job, nor that PayPay is great in that respect, but the battlefield is quite different than everything else Google has done so far.
RBA I agree with what you’re saying. This is serious business compared to most engagements Google takes part in. I’m very very interested to see how this all plays out.
Only for US based bank account holders for now
I have been using Google Checkout for the last 3 months, no problems so far, I can’t say the same about Paypal. Ebay is trying to use Paypal as the only payment option, soon somebody is going to sue them for trying to monopolize with just Paypal, their reason for rejecting Google Checkout payment in Ebay auctions is silly. Google Checkout protects buyer’s credit cards and e-mail address, so one can do purchases at various places without being worried about card details getting stolen.
Until the product matures, Google checkout will lose a lot of money fighting frauds, scams, managing mishandlings etc. It took paypal years to get to where it is now. Unless google gets most of the key employees from paypal (who knows, google does have the power to make it happen), the product probably will just help google to bleed more, and drive customers away. With the current product, $10 is not enough to win me over. It’s probably a better idea to promote checkout later when it matures. To win customer back is always harder.
When you can’t solve with with code, solve it with money!
Call me skeptical. Paypal is the market leader because they understood how important fraud protection is for both buyers and sellers. Someone got our Paypal info and tried to hit us with a $2000 fraudulent claim. I was able to call Paypal and get it resolved quite quickly. Now think about this, have you ever tried to get Google on the phone?
I hate Paypal’s guts. Those guys are absolute con artists, until recently they didn’t even have a toll-free support phone number. While I’m not really a big fan of some of Google’s ideas either, this is one fight in which I will definitely be rooting for the big G.
Paul – the only thing PayPal knows about fraud is to make sure one of its users gets stuck with it. They are the market leader because they built a very viral product by paying people a $10 referral fee early on, and no one could catch up, even eBay.
Interesting – shame only currently available within the US. Almost makes me think Arrington’s site could be renamed TechCrunch USA if TechCrunch UK, TechCrunch en Français and TechCrunch 日本語版 are already similarly flagged. (I appreciate few 2.0 launches are going to be internationally compatible from day one, but a surprising number are limited to users in the US – or am I imagining it?).
Paypals success has a lot to do with ebay, and vice versa for that matter. I have had a few issues with my paypal account but nothing major. Go read paypalsucks and you will see some really bad stories.
Im not mad at paypal and have both paypal and the checkout account. If given the choice I will use whichever is easiest. Google does seem to have a better interface.
Dear Google,
The year is 2007, Google checkout has been out for a while.
Can you please make it available to Canadian sellers like all of your competition?
Thanks,
Canada
Tell me about it… PayPal’s security “features” are a joke – it punishes the good users more often than the bad users. If you want someone to “keep” your money for 180 days, sell something on eBay to a con-artist buyer (the ones that like to claim “I never received the product”).
I really hope Google Checkout can survive and not die the slow death that Froogle or Google Base seem to be dying – I truly dislike PayPal.
Until ebay allows it, it will never take off.
Mike, don’t take this as an attack but do you have something against paypal?
I don’t know about Mike, but i just got a chargeback for 100 bucks from a purchase on my website made in January.
I have a signed delivery slip but i’ll bet you dollars to doughnuts that i will loose the 100 dollars plus the 10 dollars that PayPal charhges for the chargeback.
Not the first time it has happened and true to form PayPal won’t even respond to my emails.
Last year i lost over 700 on chargebacks even when i had proof of delivery.
i HATE paypal. I lose over $1200 a year in chargebacks with as much evidence that would hold up in court.
Theve limited our account when there were NO disputes. Theyve allowed buyers to open a dispute with 12 hours of placing an order. theyve broken their own policy AGAINST us in 10 diff ways. They are too powerful. and act illegally.
even with a class action lawsuit against them, they continue to do the same things they were sued for and lost in the first place. they dont care, they settle and make money. You do not get your money back with paypal and they say, “Its your money”. yes it is so how do they get to steal it?
theyre ruining my biz of almost 10 years running.
paypal hates their sellers and punishes them. just like ebay they give ALL RIGHTS to the buyer when it is the seller that is bringing them an income. and a HEFTY one at that. I wish someone would take down paypal.
i HOPE google beats paypal because we need a viable competitor.
everytime one pops up and and even LOOKS like its coming close, paypal/ebay BUYS them.
As a regular user of paypal for over 4 years, comparing Google Checkout with Paypal is like comparing Apple and Orange.
Paypal service is awful, I mean very awful. Write this down, paypal days are number. You will notice that paypal recently allow credit card from their home page. So this may be a sign of things to come. And as for ebay, forcing customers to use paypal is a risk.
Think of online darlings as empire and since no empire lasts forever, I think ebay should watch out. For now, nothing can stop Google.
Be on lookout for Google Auction….Just my 2 cent
paypal have not further developed their payment system since ebay took it over. it’s still the same, nothing new, no new features. They need a kick in the butt to get them back to innovating again. They need to focus on small merchants and software developers who use the service all over the world to sell their services and products.
simple things like being able to save buttons to your account so if you want to make a minor change you don’t have to recreate the button from the start (encrypted buttons) and many more innovations which would help the small merchant. fraud protection is important, but they must work with merchants and see what they want from the service.
i look forward to google checkout being released worldwide soon, hurry up google.
paypal, competition is good and hopefully this threat will make you sit up and take notice and improve your service.
I am not a Paypal apologist – I don’t use eBay I’m just a user of their virtual terminal. There are many things I don’t like about them and there are plenty of horror stories.
But if I have a problem, Paypal’s phone number is 402-935-2050. What is Google’s? If you are a vendor and your business is relying on it, don’t give me a web form or an email address.
Google is also pushing sign-ups in their welcome email when you sign-up for Google Checkout…
“Pass it on! Forward this email to your friends so they can
sign up before Feb 15, 2007 to get a $10 bonus too.”
I LOVE PayPal. I can call a live person until 9PM PST with debit card problems, the money I’m paid is instantly available in my PayPal debit card. Google is nowhere near the same service– they’re more like a 2CO almost, but not really that either. They’re just another place storing my information, great.
PayPal pays me interest, good interest, no minimum balance. I get a debit/MC card. I get 1% cash back on all card purchases. I get a one-time use MC number for real fraud protection. None of those is possible from Google, or from any bank, for that matter.
Google will give me $10 for me to let them store my personal private card and purchase information. No thanks.
There are plenty of people with some bad experience with PayPal. But that’s the case with most companies. Amazon once refused to pay over $10,000 (!) due to our site because we were outside their TOS as an affiliate (iframes, long story). Zero recourse, though. We were under Google penalty for 6 months once, and they always claimed the site wasn’t. Until they said it was, then it came back. That was probably even more of a hit.
Bottom line is I don’t trust any company more than I have to, and Google’s going to have to offer a lot more than $10 to get me to switch from anything, much less from PayPal.
There is no company in the world that knows more about online payments fraud than PayPal. No company, period. Online payments is inherently a risk management and merchant integration business and no one has even close to the same expertise in these areas as PayPal.
There is a reason that PayPal rose above all of the hundreds of other online payments providers, including Citibank C2it, Yahoo’s paydirect, eBay’s Billpoint, Western Union, and all of the other online payment wannabees and startups.
To say that there is any threat to PayPal’s market leadership in online payments is simply ridiculous. PayPal isn’t going anywhere and in fact it’s growing like a weed.
Google is simply buying their way into the online payments space through promotions and by giving away payments processing. By the way, Google pays 3% to process all of their payments on their end, so the amount of money they are losing becomes non-trivial as volume increases.
The main reason Google is in the payments space to begin with is that they want to know when consumers complete an ecommerce transaction. They way they can know that is that GC transactions complete on a Google-hosted page. Well guess what? Most merchants worth their salt know that it’s better to keep the consumer on their own sites rather than sending those hard-earned consumers off to Google.
Also ever notice that almost any GC merchant you’ve ever heard of came through GSI commerce, an online payments aggregator?? I wonder what Google is paying those guys??
Paypal and Google will go head to head, but until Google works out their kinks and errors, paypal will lead for now. Paypal is the 800lb gorilla in the payment arena, but paypal’s arrogance for limiting funds and interrupting access is borderline illegal. They’ve been sued, fined, and more but still get away with it. Strengthening paypal with ebay only makes them stronger. Google checkout is nice and we accept it on our site (yet not implemented), but haven’t had any transactions come through to validate their service claims. I completely root for google here but it’s a tough battle.
I’ve never had a problem with paypal and I wish people would always use that option instead of the normal credit card option our site also offers.
looks like your new linking strategy is in beta – both readwriteweb and centernetworks covered this the other day along with searchengineland which you mentioned.
this feature is going to cost google dearly. i have a paypal account. it rocks. it even gives me virtual credit card numbers for my online shopping. i have no reason to switch to google. that is, i switched once….to take advantage of the 10 bucks then never used it again.
wonder how many tens of millions they will lose from this.
google answer = dud
google checkout = dud
i love their spreadsheet and calendars, but they ain’t making money from those features either.
If only I could go use that $10 at allofmp3.com
crimsonquaker – I wouldn’t call Western Union a start-up or a wannabe
Paypal has greatly increased its service over the past couple of years, but they still have a long ways to go. I try and only use AMEX whenever possible because they’re by far and away the best at dealing with fraud and handling issues, despite whatever the merchant or paypal-is-not-a-bank does. Paypal lost $2000 on one sale a while ago from us, simply because they didn’t respond to Amex in 90 days so Amex refunded us the money.
What happened to bitpass? I’ve still got countries I want to pay that can’t get anything except through elance to. Would be great if Google can go where Paypal doesn’t yet.
Since we are in free market economy, no amount of hypes or news can save Paypal. Calling paypal on the phone did not solve my problems.
There is a choice here. Since paypal sucks for me, I switched to Google. I love google and everything it represents.
It is a big sky, birds can fly without touching one another. Again, time will tell. I hope Google does to Paypal what it did to Yahoo. Wake up guys, new century, new day. Online checkout is not anyone birth’s right. Any company with the knowhow can do it. I believe Google has the technology and the human capital to do this even better than Paypal.
Paypal is not where he is today overnight. So do not judge google checkout the same way you will judge paypal who has been in the business for 3-4 years. Bite me if you want…that is just my 2 cents. Embrace competition…It is a healthy thing.
“The illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.” – Alvin Toffler (2000)
Most of my experiences with PayPal have been miserable. I’m sure they’re better than they used to be, but yikes! I hate them still.
Dear Google,
Take it international. Then we’ll talk.
Sincerely,
Non-US PayPal user.
go gettem’ google
Kill that SOB gaypal!!!
Do you think google checkout makes it easier (than paypal) to accept credit card payments on the web? It seems like when you’re starting a small company or non-profit org, there are a million annoying ways to do it, but no easy way.
Using Google Checkout means you a support a company that funds the drug trade, child sex trade, censorship, and the obliteration of the livelihoods of artists.
Screw Google. Even at its worst, PayPal can’t compare to the sheer evil Google has unleashed in the past two years alone.
Google Checkout Merchant fees are actually waived for the rest for 2007 also…. FYI. So I’m paying NOTHING to accept credit cards.
Andre
I signed up for Google Checkout a few weeks ago and so far I haven’t been succesful. I sent a e-mail invoice and they were not able to use it. I tried reverse engineering their shopping cart but everything is encoded so no joy there. I have been through the instructions but the examples are not useful and I have to know a lot to use them. It took me less than five minutes to figure out PayPal and I use PayPal e-mail invoices all the time. I tried to signup for the relevant Google groups but can’t get them to accept my signup. Error code would indicate that someone else has taken that user name but I own the domain so I’m sure that isn’t true. So far a crash and burn experience.
A couple of observations to throw into the ring.
1) Based on comments here, the *percieved* ability to be able to protect against efraud is a huge brand differentiator. Why this is true is obvious from a consumer’s perspective, but consider also the merchant. Research by Cybersource’s 2006 Fraud study suggests that while the real payments fraud rate is approx 1.1% of accepted orders, merchants reject 4% of orders based on suspected fraud. That’s 3% left on the table depending upon the merchant’s confidence in the real-time fraud detection technology being used. That’s a $6 billion problem if you believe Forrester’s estimate that eCommerce revenues in the US was in the order of $200 billion in 2006.
2) Because of the alarming rise in the use of compromised computers in eFraud, the ability to track reputation of machines now becomes an essential part of the fraud detection process. Here is both Google’s strength and weakness. Due to the economics of botnet herding there is a material overlap in machines committing click-fraud, spam and eFraud which means Google has significant visibility of these machines across Adsense, Gmail and now Checkout. Cisco didn’t give Ironport $850m just for its email filtering technology – Ironport’s host reputation network was able to track millions and millions of malicious IP Addresses on the internet which you’d expect would be handy for a router company to know. Australian company ThreatMETRIX is also making a tilt at that space with its Internet Credit Bureau approach. Google’s weakness however, is that there is no way that the majority of its largest Adsense customers are going to hand Google, or any other company for that matter, the keys to their advertising, conversion, payments and CUSTOMER information. If you are a CEO, and you are currently using Google for both Adsense and Checkout, then read that last sentence again.
Does Google Checkout support other country other than USA?
PayPal and Google Checkout are two different products. With PayPal you don’t have to disclose the content of the shopping cart (you can charge the customer for Invoice #12345), which is not possible with Google Checkout. Using Google, you need to provide detailed and precise info about all line items. As being primarily a search company, you can actually smell Google’s intent to own the information of WHO sells WHAT to WHOM at WHAT PRICE and WHEN. This information is priceless! It won’t take long when this info will bite back the merchants. PayPal has a virtual terminal, mobile payments and a Pro version that actually allows you to charge customer’s directly. PayPal also enables P2P payments, so, again, these are two different products. PayPal will soon introduce hardware tokens for two-factor authentication, which will eliminate 99.9% of the phishing attacks.
There are lots of PayPal haters. I personally had (and still have) many problems with them (both as a customer and as a merchant), but at this point they don’t have an alternative. My account was limited for over a year, but it was all my fault, so, I can’t blame them. All merchants will confirm that during the last 18 months they have improved a lot and they’ve added major brands as merchants, which is a remarkable accomplishment.
It’s good that now they face some competition from Google, which guarantees that they will only get better.
It is not Google Checkout vs. Paypal, but more Google Checkout vs. the greedy payment processing industry. It was time for another big player to lower all the ridiculous fees for the easy task of processing payments.
I cannot wait until the Google coupons and Google checkout will work hand in hand and become serious competition in these markets. It was long time overdue.
My big problem with Google Checkout is it uses the same login and password that every other Google service uses… the login and password I use on random web terminals.
I don’t want that. I want a separate password for any system that can remove money from my bank account. PayPal gives me that, Google Checkout does not, not without jumping through hoops and setting up multiple Google accounts.
Well then don’t use it for random web terminals?
As I said, whether efraud or not. Google has the human and technology resources to do it. Maybe that is why over 1300 geeks send their resumes to Google everyday. We all want to be on the winning side. Not on the other side;)
You either compete or drown. Paypal has a choice to make. Otherwise paypal days are numbered. Competition is good for America.
There still isn’t really a lot of comparison between Google Checkout and PayPal, at least on a customer level.
IMHO, Paypal is good, but I could do without the emails from a fake Paypal asking me to update my info and enter in all my data again. I wonder how many people were sucked into that scam.
Google is entering shark infested waters. They may have a lot of money to throw at it, but they could get seriously bitten in the end.
Google is abusing its monopoly powers to enter new markets! Oh my god! The sky is falling! Where’s the DOJ?
I have heard all the horror stories about PayPal but I have used it for years without incident and I think the vast majority of people have too. If the way Google treats AdWords and AdSense customers is any indication of how they’ll treat Google Checkout users, I think I’ll stick with PayPal.
I’m glad there’s another option to paypal and anyone who’s used paypal for a while is glad too.
Paypal is a major PITA for a LOT of things.
It’s still the wild wild west, everyone is grabing for market share – or falling behind.. For google (my humble opinion) it’s just another stratigic play.. because even the giants [read :: MicroSoft] can be left in the burning hard drive dust of the fickled www, internet, net, web..whatever.. Cheers
I would love to use google checkout, but it’s not international. I can’t set it up because I’m in New Zealand, and even if I could I could only sell to those in the US.
I use PayPal at the moment to accept credit card payments on my bla.st advertising website. It was really easy to set up, and integrates with my website automatically. About a 5 seconds after a person buys a card through paypal it is updated on my site.
http://bla.st/