At a conference last week in Silicon Valley, Google talked about its online payment system, Google Checkout, with a focus on its advantages over PayPal. Google Checkout is being touted as a major move by Google to enter the $108 billion market for online commerce, with a strategy already in place that includes Google Checkout, Google Base, Google Product Search and Google Search itself as key components.
Google manager Michael Feldman, who spoke at the conference and works with merchants using Google Checkout, did not straighten out PayPal, but did make some interesting statements about why merchants should choose Google Checkout over PayPal.[/DATAENCODE
They’re different. They have different purposes. PayPal uses a peculiar, modified form of payment, charged at the end of the shopping process, when the buyer is ready to pay, and the seller accordingly accepts this type of payment. Google Checkout offers its solutions much earlier in the buying cycle. We help consumers find a merchant, and we can help with the purchase as well. Using Google Checkout, the merchant can influence the user’s desire to purchase a product (service) much earlier in the buying process. That is, our system initially sets the direction of the buying process itself, Feldman said at the Searchonomics conference.
Unlike eBay, Google helps sellers sell their goods (services) from the initial search point (which is where the buying process begins) all the way to the point of payment. Google Checkout users will never need to enter their information for other sellers again. And that’s the factor that reduces the number of shoppers who give up on purchases during long pre-purchase procedures involving passwords, credit card numbers, etc., Google product manager Eve Andersson said.[/DATAENCODE
Interestingly, Google is using its brand to influence customer choice, in case the ubiquitous Verisign check shows the site is safe.
Google’s integrated shopping systems include, for example, Google Base. Users can use it to upload product information. This data is entered into Google Product Search, formerly known as Froogle. If a seller uses Google Checkout, the corresponding icon appears on the product search page. Google analytics is also integrated with Google Checkout. This allows marketers to track the buyer’s journey from initial search to the point of product purchase.
Eva Anderson also highlighted what she thought was one telling moment with Google Checkout for a camera vendor, Ritz Interactive. She said this seller saw a 24% increase in purchases with Google Checkout, as well as a 23% increase in visits during the holiday season, thanks to ads with the Google Checkout logo next to them.
Such a broad approach to the shopping procedure is, of course, a big threat to eBay. Firstly, there is the possibility of luring some eBay users to use Google Checkout, due to the more convenient payment method. However, much more important here seems to be that if online shoppers become even more active in using Google Checkout (usage levels are not that high right now), PayPal may go for lower prices for its services.
It’s clear that even though some merchants use both Google Checkout and PayPal at the same time, buyers will still only use one of these systems to make payments. Why log in to PayPal if you’re already a Google Checkout user and have automatically logged in through Google?
In addition, a big concern for eBay is that PayPal is also one of the fastest growing branches in terms of revenue. The other branches are still trying to sort out the slow growth problem.
In an attempt to allay fears among sellers who have already spent a lot of money on AdWords and AdSense, Michael Feldman of Google said that some have the feeling that Google is not giving sellers any information about their transactions. We return all information except credit card numbers. However, there may be a perception that we don’t do that, Feldman said.
In addition to his words, however, Feldman stressed that Google Checkout is just an alternative, the purpose of which is not at all to replace the usual shopping carts of merchants, nor existing payment systems.
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