July 7, 2006, 12:00 AM

Lots of people like Google Checkout, but eBay doesn’t

EBay will not allow sellers on its platform to accept Google Checkout, Google’s new service that allows consumers to register payment and delivery information with Google, then use it as a one-step checkout process at a multitude of stores.

 

A lot of e-commerce platform providers have integrated the new Google Checkout service into their offerings-but eBay won’t be one of them. EBay announced today that it will not allow sellers on its platform to accept Google Checkout, Google’s new service that allows consumers to register payment and delivery information with Google, then use it as a one-step checkout process at a multitude of stores.

EBay gave as its reason for blocking the service that Google Checkout is new and untested. “Google Checkout was just introduced last week,” an eBay spokeswoman says. “It’s too soon for us to know what the history is on the service. Also we need a little more insight into if and how people will even use the service-we just need more information.”

Others, however, believe that eBay’s decision is a sign that it views Google’s new payment and checkout service as a major threat. “Google Checkout makes buying online faster and easier, so I think eBay’s fear stems from that,” says Scot Wingo, CEO, ChannelAdvisor Corp., which develops software that allow merchants to sell on eBay and other platforms. “I would guess this action is to buy eBay some time to match the Google innovations.”

Google Checkout, launched last week, enables shoppers to make purchases from participating stores with a single Google log-in.

EBay sets no specific time frame for establishing a track record, the spokeswoman says. “We do look at all of those factors outlined in our policy as well as feedback from our community,” she says. “If there’s demand, we certainly take that into consideration.”

But Google Checkout functions as a credit card gateway, rather than as a new or potentially fraudulent payment method, Wingo says, and eBay allows sellers to use gateways, such as Verisign, CyberSource and Authorize.net. The online auction giant also allows “very odd things” like Canadian Tire payments, he says.

Google Checkout poses a threat to PayPal, eBay’s payment subsidiary, according to Citigroup analysts. While PayPal offers more funding options, has a stronger trust and safety reputation, and broader merchant acceptance, Google Checkout “has leapfrogged” PayPal in speed of checkout for consumers and transaction fees for merchants, the analysts said in a July 5 report.

“For most merchants Google Checkout is materially cheaper than even the cheapest PayPal fee structure (for sellers who do over $100,000 in monthly sales),” the report said.

With Google Checkout, merchants can process $10 in sales at no charge for every $1 they spend on Google’s AdWords program. The standard rate for Google Checkout is 2% of the sale plus 20 cents per transaction.

By banning Google Checkout, eBay is limiting sellers’ options, a move that will upset sellers, particularly multi-channel sellers, Wingo says.

Other major industry players, including ChannelAdvisor, GSI Commerce, MonsterCommerce, and Marketworks Inc. are integrating Google Checkout into their e-commerce platforms. Retailers offering the option include Backcountry.com, Jockey, Starbucks, Levi’s, Timberland, Buy.com and Ritz Interactive sites.

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