June 28th, 2006 | 4 MIN READ

Google Checkout - What is it?

Written by Jason Billingsley

Google has finally release a product/service that is NOT stamped with a 'beta' moniker - Google Checkout. I am a fan of Google. I don't believe they are turning into an evil empire, nor are they taking over the world. However, Google Checkout is a fine bridge to moving beyond monetization via B2B and embracing the wallets of consumers (though they will still be making their money from businesses at this point still).

What is it? (From the horse's mouth)
"With Google Checkout™ you can quickly and easily buy from stores across the web and track all your orders and shipping in one place."

How does it work?
Instead of checking out using the merchants regular shopping cart checkout method, buyers have the option to click the 'Fast checkout through Google' icon, whisking them away to complete the transaction on Google's service. The benefit for consumers being they can store all their addresses and credit cards and track all orders in one place, and use them at multiple ecommerce stores. Sound familiar? Microsoft tried it with Passport (though it was primarily for identity management) and we have seen it's adoption wane.

Why would an online retailer offer such a service?
Well, if you are an AdWords advertiser (and really, if you are serious about online retailing, who isn't), once you are up and running the Google Checkout badge will be displayed on your AdWords ads. Something I imagine will help your ad stand out (an icon in a land of text).

The kicker - for every $1 you spend on AdWords, you can process $10 in sales for free. For sales that exceed this amount or if you don't use AdWords, you can process them at a low 2% and $0.20 per transaction.

What are the caveats?
What I am seeing on most vendors' site is coupons, gift certificates, and gift wrap are not available when using Google Checkout - however, there is an API that allows merchants to tie this functionality into their system. It is dependent on the level or type of integration embarked upon.

What are the downfalls?

  1. At first glance it appears you would have to manage orders in two separate systems. If I dissected the API a bit more, I could determine if this is in fact the case.
  2. Depending on your user base, more options are not always beneficial.
  3. Possible loss of visibility into checkout abandonment points

What about PayPal?
PayPal has a similar offering to Google Checkout, but it is slightly more streamlined. A fully integrated PayPal offering allows users to complete a checkout without ever leaving the merchants website. Will Google Checkout displace PayPal? Not likely. PayPal has a stronghold in the P2P transactions and the bread and butter will remain there for sometime. eBay is not likely to allow sellers to conduct transactions using Google Checkout - why would they?

Where does Elastic Path fit in all of this?
Stay tuned. I am sure we will do a thorough investigation of the most appropriate method of integration and gather feedback from customers on the demand for such a service. Elastic Path ecommerce software is currently fully integrated with PayPal, but few customers utilize the feature - it will be interesting to see how much merchant adoption of ecommerce software with Google Checkout occurs.

Final word
I think this is a great move for Google. This service will be glue for many of their offerings in the future. I think they made a mistake with the branding of it as it theoretically restricts the service to being a vendor to consumer transaction platform. 'Checkout' is not a versatile brand in my mind - GBuy is. But, perhaps Google doesn't have an eye on markets like mobile P2P transactions or offline transactions like PayPal does.

I only assume PayPal will make a move to offline sooner than later based on my experience in the eBay campus store - employees can swipe a card (kind of like an ESSO Speedpass, and the purchase is deducted from their PayPal account - very slick).

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