Digital Transactions Authoritative, insightful and timely information for payments professionals
Ebay Inc.'s decision to bar Google Inc.'s new payment product from its massive online auction site doesn't seem to faze the online search company. Indeed, the executive in charge of Google Checkout, which debuted less than two weeks ago (Digital Transactions News, June 29), tells Digital Transactions News Google has PayPal under consideration as a payment method for the new service, which currently works only with credit and signature debit cards. PayPal Inc. is a unit of eBay. “We have a really good relationship with eBay,” says Benjamin Ling, product lead for Google Checkout. At the same time, though, Ling says eBay is making a mistake in not allowing buyers and sellers to use Checkout. “We believe [eBay] should allow Google Checkout,” he says. “They should promote complementary products. It will be faster for buyers to buy and sellers to complete sales.” Only days after Mountain View, Calif.-based Google launched Checkout, eBay added the payment service to a list of 39 payment products it will not allow sellers to accept, most of them fairly obscure brands. On the other hand, it lists a dozen services, besides PayPal, that it does permit, including Bidpay, CertaPay, Checkfree.com, and Xoom, but also less well-known brands such as Allpay.net and Canadian Tire Money. On the “Accepted Payments Policy” page of its Web site, eBay says it “wants to ensure that the marketplace offers buyers an array of safe, appropriate, and convenient payment choices for the marketplace.” It adds it “strongly encourages sellers to offer payments through PayPal…” When evaluating a new payment service, eBay says it looks at such factors as whether the service offers protection of privacy and anti-fraud features; involves precious metals; and has a track record of “providing safe and reliable financial and/or banking related services.” The policy adds that “new services without such a track record generally cannot be promoted on eBay.” In addition, the company says it looks at the “identity, background, and business interests” of the service's sponsor. Google and eBay, San Jose, Calif., have increasingly come into competition with each other, not only directly in online payments but also with a deal eBay concluded this spring with Yahoo! Inc. in which, among other things, that online search company agreed to promote PayPal. Ebay's marketplace concluded $12.5 billion in merchandise sales in the first quarter and ran 575.4 million listings for sellers, 15% of which it considered “store” listings. Still, even without access to eBay, Ling says Google is “very pleased with the progress” Checkout has made so far with merchants. The service lists 102 merchants on its site as a representative sample of those that have agreed to accept Checkout, at least some of which are currently clients of Google's AdWords advertising service. “Right now we're seeing a lot of interest from merchants who are AdWords clients as well as [those who are] not AdWords clients,” Ling says. Google has tied Checkout closely to AdWords, a service that allows merchants to run short text ads next to related search results, paying on a per-click basis. AdWords clients can use their spending on the ad service to pay for processing on Checkout, which charges 2% plus 20 cents per transaction. Ling refuses to say how many users have signed up for Checkout, which requires consumers to enter information such as billing addresses and payment-card account numbers, all of which is stored for later use on accepting merchants' sites. “At Google, we don't release adoption numbers, but I will say we're pretty pleased with adoption so far,” Ling says. As for the restriction of users to Visa, MasterCard, and other general-purpose card brands, Ling says other payment methods, including stored value and the automated clearing house, are under consideration. “We're really open to all sorts of payment methods that make sense to consumers,” he says. PayPal allows users to fund accounts via prepayments and the ACH as well as cards. Google decided to launch Checkout, Ling says, because it had discovered online shoppers were frustrated with current Web-site checkout processes, which he says consumers find slow and tedious each time they visit a new site. This, he says, drives down conversions. “Over half of users abandon shopping carts for whatever reason,” Ling says. “We want to remove that friction.” With Checkout, buyers pay by clicking on a Checkout icon and entering a user name and password. No other data entry is required. Google stands in as the merchant for the card transaction, settling funds to the merchant and paying relevant interchange.
