Has Google's Paypal Killer Just Struck A Vital Blow?
In an email sent out to members of their developers forum, Google has just announce that their online payment service, Google Checkout, will remain free for users through the end of 2007! Google had been running a holiday special this month where sites that accept credit cards through Google Checkout could do so for free (compared to Paypal's ~$.40 & 3% transaction fees). The email from Google noted that their promotion had seen a positive response from merchants and therefore extended the offer. So...now two questions remain: 1) Why would anyone continue to use Paypal for their own web or e-commerce store....and....2) What affect will this have on eBay and Paypal?
A couple of weeks after Google launched their Checkout, eBay's CEO Meg Whitman was interviewed about the effect that Checkout was having on eBay. Whitman downplayed Google's payment service, stating that Paypal had seen no affect whatsoever, and more-or-less bragged about eBay and Paypal's dominance as the leading online retailer and payment service. She even banned use of Checkout on eBay.com and even went so far as to put a policy into effect that would make it an eBay policy violation for any eBay user to process payments for eBay items via Google Checkout on the seller's own site or by sending buyer a Google Checkout invoice.
We aren't quite sure why Whitman would act so cocky about Paypal's dominance, especially when there had been reports of eBay's concern over G-Buy (which was Google Checkout's original name). Froogle.com has added a link on their searches so that buyers can choose to search only stores that offer Google Checkout as a payment option. The number of items and stores with Google Checkout continues to grow quite quickly.
We've been using Google Checkout for about over a month on both of our stores with no problems thus far. It seems to be an efficient and safe way to pay for items online and to accept payments as well. Probably the best thing about Checkout is their customer service, which exceeds that of Paypal by such lengths that a debate on comparison between the two is moot.
Google Checkout has been billed as the "Paypal Killer" and it seems that this latest move by Google will end up being the fatal blow. We at Firemeg.com anxiously await official comment from eBay management.