Google Launches PayPal Rival

Google Checkout Launched

Roy van Rijn informs us that Google's new online payment system is now online. "Under the name Checkout, the venture offers an incorporated manner to search, advertise and pay. If you buy something on Checkout, 2% and $0.20 go to Google. Paypal, the biggest competitor uses 1,9% and $0,30. Analysts compare Google/Paypal to for example Visa/Mastercard living peacefully together, while others predict the end of Paypal." W3K adds "You can use your Google account to store an unlimited number of credit cards and addresses. The service allows you to track all your orders and shipping in one place," and adds a link to a quick video tour.

NYT article

NYT times [nytimes.com] also has a interesting article on this with quotes about Google's plans on what they want to do with this product.

Re:NYT article

"The goal here is to make it be one nanosecond from the time the customer decides to buy to the time the transaction is complete and the product is on the way," Mr. Schmidt said.

Impulsive shopping here we come!

Re:NYT article

"Wright 5 dollars"

Does it have an old plane as the background image??

Money transfers?

My biggest question is if I can use my checkout funds to pay for stuff. I live in Greece, so I can't withdraw PayPal funds (cheaply, anyway), but I can use it to pay for my hosting/online shopping. If I can't do this with Google Checkout, it's all but useless to me.

Re:Money transfers?

Learn the difference between "Gpay is useless" and "Gpay is useless to me". I would pay for your English lessons, if I could use Gpay to transfer funds from Greece.

Re:Money transfers?

Recently stuff offered to USA and Canada only has started bothering people as they see it as a way of "We don't give a f to you" attitude.

For example I know it is not only Apple to blame but iTunes Greece store existing and there is no iTunes Turkey store while countries has similar markets (wonder where enemy brothers term come from?) makes you think like "Oh well, Apple doesn't give a heck to our country" and get eMusic.com subscription.

Same goes for Rhapsody of Real Networks.; You see story on Slashdot, immediately click the URL with a list of rare stuff you have in your mind, you see "Available to USA only". It is like you go to a store and a bodyguard pushes you out because where you live.

I hope I could explain the background of "Why not available to my country?!" types of postings a bit.

btw, I know it is RIAA to blame for those "music" stores.

US Only

The registration form lets you choose a country, but the terms and conditions state that you must be a US citizen. I didn't click on the "I agree" button.

Flashback to the early days of Paypal: Someone pointed me to this new service, and when I get to the registration form, it had "Country: USA" hard coded in the HTML.

Ebay?

So, can it be used as a method of payment for Ebay auctions and other person-to-person transactions?

And...

I don't think PayPal will be going away anytime soon. PayPal's business is driven by Ebay, and PayPal is part of Ebay.

Hooray!

Now Google can keep all of my credit cards on file for me! Maybe the NSA should contract them for a new domestic spying program.

New Revenue Streams Trend to Conservatism

I think the most important thing about this entire endeavor is that it is the first Google product that plans on actually introducing a revenue stream besides advertising to the company (especially since the Google Pay Video system has more or less fell through at this point in time.)

I'm not quite sure what that means for the long-term health of the company, but I suspect that the more streams of revenue a company has, the more likely they are to become conservative, entrenched, and reluctant to embrace change. Google has managed to avoid all that because they've had a strong beam focus on a single revenue stream (ad dollars) - as they start matriculating, I suspect that beam focus will dissipate.

But then again, they're Google - they just work smarter than basically every other company out there today. So I put nothing out of their reach.

Re:New Revenue Streams Trend to Conservatism

Read their pricing scheme; sellers get free transactions if they use adwords, and the more they spend on adwords, the more free transactions they get. So, while this is definitely a new revenue stream, it is *also* a way to further bolster their main revenue stream.

Paypal has one thing on google...

4.7% interest on money contained in paypal accounts, no minimum. That's hard to beat for a pretty liquid fund of money.

Re:Paypal has one thing on google...

Check out this blog Bank Deals [blogspot.com]. While a lot of the CD specials on there are for local credit unions, there are also a lot of great online bank deals. Etrade, for example, currently has 3-month CD at 4.75% [blogspot.com] and the longer-term CDs going up from there.

PayPal isn't going anywhere anytime soon

While we all love Google and everything it produces over here on slashdot, I don't think that they are going to crash PayPal's party in the too near future.

This is what they said when Blockbuster started competing with NetFlix, but NetFlix is doing quite alright by themselves, and PayPal is, in my opinion, in better shape in their space than NetFlix was. PayPal and eBay are pretty good bed buddies, and PayPal is already accepted on thousands of other websites. People know the name, people have used it before, people know it works.

Regardless of how great the product Google produces turns out to be, people will still use PayPal as long as PayPal remains competitive, which I imagine it will. I mean, for all the people who rave and rant about how amazing Gmail is, the mailing list that my mom's quilt shop has accumulated is saturated with yahoo, hotmail, and aol addresses, with not a single gmail address to be found out of a few thousand names.

Interconnected services

OK, I acknoledge that I'm paranoid, but the thing that makes me nervous about google services is that thay use single account for all purposes. This not only allows to keep track of my whole life, but also allows a person, who hijacks my email account, take control over my mail, internet messenger (IM was used for several famous frauds in Russia), and now money directly!

Re:Interconnected services

Yeah - I don't like that my gmail password would now give someone access to my credit card if I were to sign up for Google checkout. I like to keep things more compartmentalized than that. For things like e-mail and other lower security things I use one set of passwords, but for PayPal I use a unique, much longer, and more secure one and make sure never to have my Browser store it.

Also, it's convenient to stay logged into Google for gmail, but I wouldn't want to do that at work if it gave access to my credit card! I think a seperate password, required each time you buy something, would be better than using your one password to the Googleplex.

Re:Interconnected services

You know that you don't have to sign up for all these services under the same account, right?

Micropayments

> 2% and $0.20

So they didn't want to just take the 2% so it could be used by websites to charge tiny amounts of money per page/hour etc? $0.20 blows that intriguing possibility out of the water. They could accrue the amounts spent until it reached some value where the transaction was worth performing, if they're worried about thousands of $0.001 hits slowing down their system or costing too much to run.

US residents only!

Has anyone noticed it's only for US residents?

By agreeing to this Terms of Service for Buyers, you represent that you are:

18 years old or older;

capable of entering into a legally binding agreement; and

a resident of the United States.

Need more payment options!

Before Google Checkout has much hope of usurping PayPal, they'll need to accept more payment options.

Paypal currently allows payment direct from a bank account (I don't expect Google to need this), Visa, Mastercard, Amex, Delta, Maestro, Visa Electron, Solo, Discover, and more if you count their other services. That's at least 10 ways to pay.

Google, on the other hand, accept Visa, Mastercard, Amex and Discover. With only 4 ways to pay, I suspect Google Checkout is not an option for many people.

Disclaimer: I live in the UK and this is based on my experience with the UK PayPal service. I also agree with the sentiments of paypalsucks.com, and would like to see Google smash PayPal to pieces if they can Do No Evil. YMMV.

more info

It would seem I wasnt fast enough to post this story, but I had a couple more links and useful info, so here it is:

Google Checkout [google.com] has been released today. From their blog: We've heard time and again from users: "I find great stores through Google search, but every time I try to buy from an online store, I have to re-enter the same billing, shipping, and credit card information. There are too many steps. Why can't it be as fast as a Google search?" This motivated us to improve the online purchase process, and so today we're announcing Google Checkout, a checkout option that makes buying across the web fast and easy."
Google CheckOut includes single signon and badges on adwords of merchants that use Google CheckOut.
Features include using many addresses and many different cards for buyers [google.com] and a "Payment Guarantee" against chargebacks for sellers [google.com].
AdWords users get $10 in sales processed for free for every $1 spent on AdWords.

For those of us text weary, there are videos for buyers [google.com] and sellers [google.com]

Google Checkout !Paypal

If by "Google launches PayPal Rival" you mean, "Google launches a service for merchants to process credit cards". Then yes, this is a PayPal rival. This service does not allow you to transfer money from person-to-person, nor does it allow you to pay by check, bank draft, etc.

All you need to know

10. Disputes

GPC will provide various tools to assist Customers in communicating with each other to resolve a dispute that may arise between Buyers and Sellers with respect to their transaction. If Customers are unable to resolve a dispute, we can mediate disputes between buyers and sellers if either party requests assistance. If this occurs, we will review the dispute and propose a non-binding solution, if appropriate. For more detailed information, please see our Frequently Asked Questions.

GPC may offer a feedback or other ranking system on the Service to assist you in evaluating other Customers of the Service. You acknowledge that any such feedback or ranking system represents solely the opinion of other Customers of the Service, and is not an opinion, representation, or warranty by GPC with respect to other Customers of the Service.

You agree to release, GPC, Google, and other GPC affiliates, and their agents, contractors, officers and employees, from all claims, demands and damages (actual and consequential) arising out of or in any way connected with a dispute. You agree that you will not involve GPC in any litigation or other dispute arising out of or related to any transaction, agreement, or arrangement with any Seller, other Buyer, advertiser or other third party in connection with the Service. If you attempt to do so, (i) you shall pay all costs and attorneys' fees of GPC, Google, and other GPC affiliates and shall provide indemnification as set forth below, and (ii) the jurisdiction for any such litigation or dispute shall be limited as set forth below. However, nothing in this Terms of Service shall constitute a waiver of any rights, claims or defenses that you may have with respect to a Payment Transaction under the Buyer's card issuer agreement, the card association rules or applicable state and federal laws, such as the federal Truth in Lending Act or the Electronic Fund Transfer Act.

If you are a California resident, you hereby expressly waive California Civil Code 1542, which states: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if not known by him must have materially affected his settlement with the debtor."

Re:All you need to know

When's the last time you called a credit card processor to resolve a disputed charge? You deal with the card issuer. This is no different from any other card processor agreement. Get a grip.

Typo

"The service allows you^H^H^H them to track all your orders and shipping in one place"

Regards,

The nation's #1 tinfoil hat supplier!

1,9% and $0,30 ?

The 1,9% and $0,30 rate for Paypal is if you recieve more than $100,000 to your account and you have a merchant account!

Normally, it's 2.9% + $0.30 USD. https://www.paypal.com/cgi-bin/webscr?cmd=_display -receiving-fees-outside [paypal.com]

Re:1,9% and $0,30 ?

That is 100% correct. I run a small web store and we use PayPal to process orders. We are paying 2.9% + $.30 per transaction. I would love to switch to google, but I see one issue. With PayPal people can place orders on my site, pay with a credit card, and not have a PayPal account. PayPal just processes the card. When google will let my customers pay without having a google account I will switch.

Sticking with Paypal...

I dig Google, man do I ever but I think I have reached my limit as to how tightly I integrate myself with Google, inc. Google IS a publicly traded company and it's only a matter of time before "Do no evil"(tm) becomes "We do less evil than everyone else" (tm). Why? Because Google is publicly traded and their only real obligation is to their stockholders. No matter of hipster-doofus-coolness culture trumps that. Just look at Apple...

They have transitioned themselved from being cool to being fairly evil (sweatshops for iPod manufacture, closing off the Darwin source)

Besides do you think for one second that eBay will make integrating auctions easy with Google? Of course not....

Paypal does suck but all of these services do and odds are Google's will too.

Re:End of Paypal ?

I'm not sure gBay agrees.

Re:End of Paypal ?

Just like GMail meant the end of Yahoo Mail, Hotmail, and the myriad of other online mail services. And how Google Maps meant the end of Mapquest andd MS Maps (??). I know that Google has created some welcome competition to many online services, forcing them to improve their offerings, but it hasn't completely killed the competition. Most people I know haven't switched from their current providers. However, I'm sure they would have if Hotmail stuck to 2MB, and Mapquest didn't touch their interface. I'm happy google's here, because it makes everyone else have to try harder. Let's hope the same happens to E-Bay. They haven't changed their interface since their inception.

Re:End of Paypal ?

Well, killing an email service is very difficult. Nobody wants to go through the hassle of sending a new e-mail address to everybody they know. So it is expecte that there would be a very slow change on this front.

But changing their mapping service as well as who they pay through, that is a whole other issue. Mapquest and MSN maps have been losing business. In light of the continual growth of the net, that is very telling. I would guess that Google is not going to kill off paypal tomorrow or over the next 10 years. But I would also bet that paypal will lose more than half of their business within five years and continue a downward trend unless they make a major change. Since ebay has taken over paypal, they have abused stores as well as users. Their attitude may start to change back to what it was.

Re:End of Paypal ?

Since ebay has taken over paypal, they have abused stores as well as users. Their attitude may start to change back to what it was.

I'm confused why people ever really use PayPal in the first place. Oh yes because it's "easy." I wouldn't mind Google, MS, or heck even SGI to go into this. My thing is that they should start off as declaring themselves as doing banking and being properly regulated. I want PayPal to die a swift death just because of that. PayPal is doing banking and should be regulated as such. I honestly think that MS, Google, or some other IT company should produce a set of software that makes it as easy as using PayPal for your existing bank to do business over the internet. The big PayPal killer will be when my 4+ local city banks can do business with each other and your local banks as easily as PayPal transactions happen.

Re:End of Paypal ?

In Canada, you can send money through your bank accounts via email, as long as both of you have access to your bank's online banking. Unfortunately it's something not many people know about.

Re:End of Paypal ?

The thing people like about PayPal is it lets you pay with a credit card. If I buy something using PayPal with a credit card and I don't receive it then one email to my credit card company will see the money returned. I could just as easily send money from my Internet banking site, but then I don't get the buyer protection.

The US, sadly, has one of the most backwards banking systems I have ever had the misfortune to do business with. Most US banks seem to regard sending money by telegraph as a horrible new-fangled concept, while banks in the EU and Japan have been allowing customers to do it for free for well over a decade. I have two UK bank accounts and one US account. The amount of stuff the US bank seems to think they can get away with charging me for is staggering; they even charge for doing a balance enquiry at a cash machine!

Your wrong about why...

Paypal isnt so much the most popular service because it's "easy"

Many other services are just as easy to use as Paypal. No the biggest reasons are:
- Its "the brand" so far as online payments go. Most people use paypal, so other people get brought in my default.
- Its trusted. For online payments, this is a HUGE deal.
- Its cheap. Really, look at what people have to pay for online banking. If you want to setup an e-commerce website, alot of payment gateways charge a monthly fee, then take a huge percentage of your revinue. Plus, payout rates ( how fast you get your cash )are much higher with Paypal then most gateways.
- It acts as a credit card proxy, so if you have a MC or Visa, you can pay with Paypal without the fear of giving out your credit card number.
- Its in bed with eBay. Alot of peoples first need for a payment service is because they bought something on eBay. Once they have an eBay account, if they buy something else online, why sign up for a different service when the one you use already works?

So, there are many reasons beyond "it's easy" that Paypal is popular.

Re:End of Paypal ?

Big difference between paypal vs google and the competing mail services. People have had a choice for years. No one complains about free email its reliable, its there, its ubiquitous. What irritates people with Paypal is the rather random enforcement of buyer and seller protection coupled with their stranglehold on ebay that pretty much makes any other method of payment impossible. After paying listing fees, final value fees, paypal fees, extra paypal fees if you want to be able to take credit cards, and dealing with buyers protection which is in my experience used in scam attempts as much as in real disputes, the ebay/paypal racket is hardly a bargain.

After all that, I still use it on occasion because I have no choice, thats the difference.

Re:End of Paypal ?

Everybody had a problem with Hotmail before GMail came around. But they thought it was the only service available, and they needed the account anyway to use MSN (I know you can sign up for MSN with another email address, but it's really hard to find that site). Hotmail still has terrible spam filtration (blacklisting everyone except your contacts is not spam filtration), and thankfully, they've gone up from their original 2MB of storage. People used Hotmail because it was there, but I don't think that many people liked it. They were all looking for a change, but It's hard to switch email addresses.

Re:Sellers will prefer PayPal to Google Checkout

So, at first glance, Google Checkout seems worse than PayPal from the seller's perspective

Actually, I'm inclined to disagree. There is a full API, and you can practically (as a seller) hide the fact you're using Google to process payments from the user if you wish. I'm writing an online store right now, and integration with Google appears to be less costly than having to get a merchant bank account and integrate with annoying APIs like Paymentech.

I like that Google placed the service on both a Paypal and full-out merchant level. Now I can do all payment processing on my site via the available web API, but still put the Google badge on the site to put buyers at ease.

Re:End of Paypal ?

There's nothing wrong with either Ebay or PayPal... that a dose of viable competition wouldn't cure in a heartbeat. PayPal has pissed off enough people that CheckOut is virtually guaranteed to be an immediate success, but probably won't kill PayPal immediately. PayPal will simply clean up its act, which is long overdue. (Thanks, Google!!) As for ebay, they are on the downhill slide anyway. They have grown too big to effectively manage, they have become a fraud magnet, and they are chasing a business model that has some curious shortcomings (most of what is currently sold on Ebay is not really well-suited to the auction format). A combination of GoogleBase and CheckOut will eventually reduce ebay to a footnote in internet history (Something along the lines of, "For those of you that don't remember Ebay, it was once the largest auction/ecommerce site by a factor of more than 10").

I will be checking out the new CheckOut, with some initial testing in my violin business [celtic-fiddler.com], and if the results are good, I may move all of my business away from Ebay.

Re:End of Paypal ?

The difference between 1.9% + 30 cents (ebay) and 2.0% + 20 cents (google) might not strike you as significant, but google now works out to be cheaper for all sales under $100.00

Don't think that the "ebay power sellers" aren't keenly aware of the difference. They know how ebay nickel-and-dimes them to death, and if they can save a few dollars a week AND stick it to ebay, they will.

Example - item at $10.00

eBay: 49 cents, google:40 cents. Difference: 9 cents.

Do 100/week, and over the course of a year you're looking at $468.00 in savings ...

Re:End of Paypal ?

For the record, if you (the seller) advertises on Adwords, they give you $10 free transactions for every $1 you spend in Adwords advertising. So if you spend $500 a day on advertising costs, they allow $5,000 worth of sales go through for free.

Re:End of Paypal ?

Paypal is NOT 1.9%. It is likely to be around 2.5% (over $3k in sales a month) or 2.2% (over 10k in sales) dpending on volume. many paypal uses pay around 3%. Google being 2% regardless of volume, makes it significantly cheaper then paypal for most sellers.

Re:End of Paypal ?

You, like some other posters, seem to think that PayPal's prices are fixed in stone forever.

Don't put words in my mouth - I never said that. Here's the reality ...

1. finally, paypal has some real competition
2. a lot of people would pay more to switch from paypal
3. this will shrink ebay's customer base no matter what, so they're going to be hit with both lower demand and lower prices
4. for google, on the other hand, their market share can only grow - and they've got tie-ins to a lot more stuff than ebay

Then there's the whole regulatory issue - ebay has had to make deals with regulators in almost 20 states ... google will just go out and BUY a bank. Then they'll issue their own credit cards, etc.

monopoly at eBay

Monopoly? I can accept payments in about 3615 different ways on eBay. What are you talking about?

Re:monopoly at eBay

Name 412 of them.

Re:monopoly at eBay

I bet you don't accept African Express.

Re:paypal's safe as long as it has a monopoly at e

You are not forced to use Paypal to pay for eBay auctions. Each seller, for each item they list, can choose what payment methods they accept. Some accept PayPal, some don't. Some accept only PayPal. Some will accept Money orders. Even for sellers that only accept PayPal, you can usually pay them through PayPal using your CC without creating a PayPal account - in effect just making PayPal their CC processor.

Customers DON'T pay...

Would you be prepared to pay 2% on every single purchase you made at an online store just so you don't have to "fill out forms"?

Remember, the $0.20 + 2% is paid by the seller and is taken out of the actual price. Consumers will see no price difference.

Re:Customers DON'T pay...

Does anyone know what Visa and the others charge for their service?

The amount charged to merchants for a sale varies greatly depending on the agreement between the merchant and the card processor. Factors can include the number of monthly transactions, total monthly dollar amount, number of chargebacks, swiped vs. manually entered transactions, etc. In general the google figure is probably in line or a bit lower than what most small business merchants are charged per transaction.

The interesting things will be how chargebacks are handled, what fraud prevention measures are in place, and who eats the cost of fraud. With a credit card I get a lot of protection and infrastructure that handles all of this. Google will have to at least match this before I will consider using it.

Personally I still don't know how Paypal manages to avoid being classified as a bank by the government.

So if they want to be banks...

Personally, you won't find me going near most of the services offered by the likes of Paypal and now Google until organisations that are acting like banks or credit companies are regulated like them as well. My high street bank and credit card have pretty crappy customer service at times, but compared to some of the things Paypal's been accused off, the other guys are saints.