Google Takes on PayPal – Google Checkout

If there’s one web company out there that can strike fear into the hearts of all the others, then Google is definitely it.

For quite some time, the online payment world has been dominated by PayPal, as its raft of features and ease of use for almost anyone has made it a logical choice for most online businesses. That was, however, until Google Checkout came along.

Google has taken their typical approach of making the use of its system totally free and easy to use. For a start, Google takes a flat 2% of any sale through Google Checkout (plus a 20c transaction fee) making Google Checkout competitive, if not cheaper than PayPal for most users.

But that’s not where its big benefit is. Google also offers free transactions on the dollar value of up to ten times your Google AdWords spend. That means if you’re a business advertising on AdWords spending $1000 per month, the first $10,000 you make in the month is all yours (with no commission for Google).

Since most businesses that have a checkout system probably use AdWords anyway, this is a massive advantage to using Google Checkout over PayPal.

But that’s not where the benefits stop. AdWords advertisers are also able to use the ‘Google Checkout Badge’ underneath their ads in the search engines and Google claims this badge improves both click-through and conversion rates (the percentage of people who buy) quite substantially.

However, Google Checkout is not just a threat to PayPal, but also to a legion of web designers who charge thousands of dollars to build custom shopping cart or e-commerce modules for their clients.

Users who sign up to Google Checkout are able to design their own shopping cart module using the built-in tools, and then simply cut and paste the HTML code straight into their site. Web development agencies who specialise in building website shopping carts are going to have to adapt and come up with new and exciting ways to build shopping carts or cut their prices drastically.

The big question that remains however, is when will Google Checkout come to Australia? Google Checkout currently supports buyers from around the world, but only supports sellers in the US and UK. Google’s information pages states that they are working to “make Google Checkout available in more locations” but can’t give specific dates.

Personally, I believe that Google Checkout will dramatically change the way online businesses are established in Australia as many website owners are crying out for a viable alternative to PayPal.

The ability to control all their purchases from one login is also a massive benefit for buyers.

Google is on the move again…

Craig Somerville is a Director at Reload Media, having worked extensively on the digital and online strategies of leading companies within Australia and around the world. With a background in marketing and economics, Craig's unique experience offers great insight into how the world of search and online marketing is changing in today's rapid marketplace. He is also a Google AdWords Qualified Professional and regularly consults on all aspects of digital marketing including search engine optimisation (SEO), search engine marketing (SEM) and social media.