Google Convinces Paranoids to Shop Online
Google Checkout has already gained a significant following in the less than three weeks it has been available. According the the New York Times, Google has declined to share how many merchants have joined the 100 who were using Google Checkout last week. This behavior follows Google’s usual “hush hush” attitude that has aided them in becoming what they are today. I personally believe that merchant participation must have sky-rocketed because as Dan Schatt, an analyst with Celent Communications, states in the article,
“other payment companies are justified in having “big fears†of Google. “Checkout is valuable to consumers,†he said, “and it’s also a great deal for merchants.â€
The Times describes how Google Checkout is attracting merchants through undercutting and rebates:
“Google charges merchants 20 cents, plus 2 percent of the purchase price for each transaction; credit card companies typically charge about 30 cents and 1.95 percent of the purchase price. Google will make up the difference when it sends each purchase through the credit card systems. For every $1 a merchant spends on Google advertising, Google will also waive transaction fees on $10 worth of purchases.”
The past success of third party billing companies like Paypal relies on consumer’s fear of credit card fraud. Recent surveys show that about half of Internet users are still too afraid to buy anything online. The percentage of Internet transactions with credit and debit cards has fallen 10% since 1999 and Dan Schatt predicts that by 2009 less than half of online transactions will be completed with credit or debit cards. Third party billing companies allow customers to submit their information only once. There is no account to remember and no worries about 23 sites out there having your credit card number, but just like a credit card, the service that is most widely accepted is going to come out on top. In the coming years I won’t be surprised if I start hearing “For everything else there’s Google Checkout.”
Posted by Chris | July 17, 2006
Aneil Weber July 17th, 2006
Google seems to have hit several hot buttons with both consumers and merchants. With a win-win solution like that, it’s hard to imagine that GC won’t get widespread adoption. This is one reason why ebay was pitting themselves agains the market by not accepting Google Checkout. The interesting thing is, as GC gets more users then more “things” will spring up and make it even more useful for consumers and merchants. It’s not a good idea to be on the other side of that fence.
Fabio Seixas July 18th, 2006
Looking foward to have Google Checkout available for international store.
Fabio Seixas
http://www.camiseteria.com
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