Targeting eBay Ban, Google Checkout Plans Party to Reach Sellers

Looking to stir up support for its Checkout online payment system among sellers on eBay Inc.'s online marketplace, Google Inc. will throw a party Thursday night in Boston during a three-day convention eBay is hosting for its buyers and sellers. The party, themed “Let Freedom Ring” and to be held at Boston's historic Old South Meeting House, where 5,000 colonists gathered in 1773 just before the Boston Tea Party, has not been officially sanctioned by eBay, which last year banned Google Checkout as a payment method in its auctions. Google officials do not have an estimate for expected turnout at the party, though they clearly hope it will help them reach sellers who are dissatisfied with eBay's ban. The eBay event is expected to draw more than 10,000 attendees. The Google executives say that while San Jose, Calif.-based eBay, which owns the rival PayPal Inc. online payment processor, will not allow its sellers to accept Checkout payments, many sellers feel otherwise. “The ban on Google Checkout is unsustainable,” says Benjamin Ling, product lead for the Checkout service, which launched a year ago this month. “Ebay merchants are demanding that Checkout be accepted.” Indeed, Ling says Mountain View, Calif.-based Google recently received a communication from the product-management team for eBay's ProStores Inc. unit aiming to kick off a discussion on how to integrate Google Checkout. ProStores manages e-commerce sites for small merchants. Ling says Google responded four days ago with a letter to eBay management pointing to the ProStores communication and formally requesting the ban be lifted. He says so far he's had no answer and that communication with ProStores has shut down. “All communication on that front has been silent since then,” he says. Ling also says Google Checkout applied for an exhibit booth at the Boston convention, called eBay Live!, but was denied space. A call from Digital Transactions News to an eBay spokesperson for comment was not immediately returned. Ebay's ban on Checkout has already been challenged by two federal anti-trust lawsuits that were consolidated last month in the U.S. District Court for the Northern District of California. The ban is also the target of an online petition sponsored by the Internet Merchants Association that has gathered more than 350 signatures. In addition to Google Checkout, eBay prohibits 35 other payment methods, including person-to-person services Moneygram and iKobo. In explaining its ban on Google Checkout last summer, eBay said the payment service was new and untested, raising the risk of fraud-management problems (Digital Transactions News, July 10, 2006). Ling argues the service is now a year old and claims “tens of thousands” of online merchants, including one-quarter of the 500 largest merchants as ranked by Internet Retailer magazine. He says “millions” of consumers are using Checkout, which he says will process “billions of dollars” in transactions in 2007. He refuses to disclose more specific numbers. As for risk, he says 98% of Checkout orders carry chargeback protection, while all transactions carry fraud-liability protection for buyers. Google Checkout relies on an electronic wallet that stores credit card and personal data for consumers, who can buy from online merchants by selecting Checkout without the need to enter billing, shipping, and account data.