Google Checkout: First Thoughts

Posted on 29. Jun, 2006 by in News

googlecheckout.jpgSo the “big news” today is the launch of the highly-anticipated Google Checkout. Although the feature was reported to be a direct rival to PayPal, the features contained within Google Checkout seem to be so different from those in PayPal that it seems Google is simply offering a safer way to shop online. The biggest difference is the lack of “storage.” With PayPal you’re able to park your funds and then use them to purchase online – which I think is a great way to keep all of my online buying and selling separate from my other bank account transactions. That way I know that the new gadget I bought on eBay using PayPal last week was purchased using the same funds that I received from selling my old laptop.

Since there are tons of reviews popping up today I thought I’d give you the straight-to-the-point version.


  • Low transaction costs – 2% + $0.20 per transaction (roughly 2/3 of PayPal’s basic rates)
  • If you also use AdWords, you can earn free transaction processing if you’re an AdWords advertiser. For every $1 you spend with AdWords, you can process up to $10 of sale for free.

  • I like how sellers hoping to use the system must submit a text-only version of your return, cancellation, and shipping policies as part of the sign-up process. Hopefully this will discourage the less-reputable online retailers.
  • Again for sellers, Google Checkout proactively identifies and filters out fraudulent transactions. Under their Chargeback Resolution policy, Google evaluates all chargebacks and, whenever possible, fights them on your behalf.
  • Citi® cardmember? Register your Citi Card with Google Checkout to get $5 or 1000 “ThankYou” Points.


  • No stored value system
  • Only about 100 stores using it as of today (I fully expect this number to skyrocket though)

As you can see, Google Checkout’s major features seem to be targeted toward sellers. It appears, however, that Google is trying to act as a mediator between you and any online store – keeping your credit card data stored and using it as you see fit. And by screening potential stores who want to use Google Checkout as an option, hopefully Google can help consumers avoid and least some of the problems that arise from doing business online with less-than-reputable retailers. It will be interesting to see how the program progresses though. I’ve signed up so I’ll be sure to keep you posted on any new developments or features.

2 Responses to “Google Checkout: First Thoughts”

  1. Thomas Madrid

    29. Jun, 2006

    Yes, they have no stored value system, but by doing this, they demonstrate that they aren’t interested in collecting interest revenue on the float of other people’s money such as paypal does. Further, this alleviates the headache of managing other people’s money, for which they would have to pay people, and for which they would need to generate income to sustain it, hence collecting interest revenue on the float of other people’s money. The percentage they collect on transactions (which is already lower than paypal) probably goes toward maintaining whatever accounting and management system is employed, whether it’s in-house or not. So if you take away the “con” of not having a stored value system, you’re left with low initial adoption, which you have already suggested is only a temporary “con.”

  2. Steve

    29. Jun, 2006

    PayPal does not take your interest on your balance. You can opt-in for money-market feature and they will pay you almost 5% on your balance – that’s in the top three rates in the country.

    I personally registered my City Dimond Rewards card to collect 5$ but I am not interested in the service. I am a heavy user of PayPal and GoogleCheckOut does not offer absolutely anything new to me. PayPal is a much more complete solution.

    If anything, PayPal will only get better thanks to Google’s compition. I also expect Yahoo to incorporate PayPal into Yahoo pay-per-click system. When that happens, I am going to switch from Google search back to Yahoo so that I can easily see who accepts PayPal.

    PayPal has over 150K off ebay merchants accepting it + many millions on ebay. Did you say Google has mere 100?

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