The acquisition will add more than 300 products to L’Oreal’s lineup.
Google Wallet will replace the payment processing service.
Search engine giant Google Inc. will retire its Google Checkout payment processing tool for merchants on Nov. 20, it announced this week on the Google Commerce blog. After that date, merchants that want to continue allowing customers to make purchases using their Google account information will need to set up their own payment processing, the company says. The same change process does not apply to sellers on Google apps or web sites like its digital marketplace Google Play, who will automatically be switched to Google Wallet for processing transactions, the company says.
Google Wallet allows consumers to store their credit and debit card numbers and billing information in one place so they can check out in two-steps from any web-enabled device. In 2011, Google rebranded Google Checkout to Google Wallet, a company spokesman says. However, Google continued to provide payment processing for retailers that had added the feature to their sites when it was Google Checkout.
Now, the company says, once a merchant sets up its own payment processing with another vendor, it can change its Google Checkout to Google Wallet Instant Buy. That new service will work the same for customers as the existing Google Wallet option in a shopping cart after they click a “Buy with Google” button. The only difference for merchants is that they’ll process the payments themselves after taking customers’ card information via their Google Wallet accounts, rather than paying Google to do so. Google last week released Instant Buy and another Wallet tool called Wallet Objects for merchants to engage customers through loyalty programs and promotions.
“This is a good thing because it allows Google to provide a consistent experience across all the e-retailers that use Google in their checkouts and for all the developers that use Google Play for their applications,” says Michael Facemire, an analyst at Forrester Research Inc. Consumers use Google Play to buy such items as apps, digital music, books and magazines or Google hardware like its Nexus 7 tablet.
He says the move is especially helpful for mobile commerce, as Google Wallet simplifies purchasing from a smartphone or tablet. “This makes it nearly an Amazon-like one-click experience,” Facemire says. Amazon.com Inc.’s one-click feature allows consumers to place orders with the single click of a button as they browse the web site, skipping the shopping cart entirely. Unlike shopping with Amazon.com, though, Google Wallet users have to click checkout and then “Buy with Google”—two clicks—when purchasing, he explains. Amazon is No. 1 in the Top 500.
Google’s decision to stop offering payment processing services to non-Google sellers stems in part from requests by mostly larger merchants that wanted to process payments from Google accounts themselves, the spokesman says. Google Checkout is harder to build into a web site than Google Wallet Instant Buy because it includes features beyond transactions, including custom tax and shipping calculations and order management tools, he says.
However, because many smaller merchants do not have their own payment processing in place, Google has worked out discounted pricing deals with a handful of vendors to help make the transition more affordable, he says. Retailers may receive special pricing if they sign up to migrate from Google Checkout to payment processor Braintree Payments, web storefront provider Shopify or e-mail invoicing company Freshbooks, Google says. Google selected those vendors because they support both U.S. and U.K. sales, they all work together and do not overlap in functionality, among other qualities, it says. The company did not reveal the specifics of the deals it arranged with them.
Blair Brewster, founder of web-only safety sign store SmartSign.com LLC., No. 446 in the Top 500 Guide, says the change won’t affect his business significantly. Originally, the retailer offered Google Checkout mainly because the search engine used to add a Google Checkout button at the bottom of links to SmartSign.com in search results, he says. “Any edge you can get, such as an ability to get more valuable real estate on the precious search results page with an ad, is critical,” he says.
However, Google stopped adding those buttons to search results last summer when it rolled out Google Trusted Stores, which provides online shoppers with ratings of a retailer’s performance in shipping and customer service, Brewster says. Without that incentive, he adds, it wasn’t worth paying Google Checkout’s fees. Google Checkout charges rates starting at 2.9% plus 30 cents per transaction for retailers processing $3,000 or less per month, which decreases to 1.9% plus 30 cents per transaction for retailers processing $100,000 or more per month. SmartSign.com uses First Data as its payments processor. It still includes the Buy with Google button in its shopping cart, along with Pay with Amazon, eBay Inc.’s PayPal and a standard form for entering credit card information.
Another e-retailer, National Trade Supply, which sells heating, air conditioning, vacuum and indoor air quality products on 12 sites, has already removed Google Checkout because too few customers used it, says director of marketing Rob Boyd. The retailer, No. 375 in the new Internet Retailer Top 500 Guide, will track the progress, features and consumer adoption of Google Wallet “with the intent on giving it a shot when we feel it will benefit our customers,” he says. “This was the case with PayPal, which we currently offer, and we’re getting there with Amazon Payments, which we’re planning on implementing in the near future.”