Wednesday, February 14, 2007

Google Checkout: should you add it to your store as a payment option?

Well... yes. Here is why.

By now you're probably familiar with Google Checkout. If not, read the intro on Google, and buy something using this service to really see first-hand how it works.

As an Internet shopper, it makes sense to me to be able to just log into my Google account and shop at different stores without having to re-register. It also makes sense to me to be able to hide my e-mail address from the merchant. On the other side, I don't like the idea that the folks at Google know about every product that I have purchased and where. Hey, good and bad like with anything else.

Why do you need to add it to your store as a payment option? The reason is that this is not the right question. The right question is... why not?

Google has huge pockets, so they are marketing their new payment system in a way that is as aggressive as you could ever imagine. They are paying ecommerce software developers to include it in their products (which we at Early Impact did in the fall), they are paying customers to use it (rebates on first purchase available at many stores), and they are giving merchants free transaction processing for 2007 (so you save around 2% * sales, compared with the same sales processed via another payment gateway).

PayPal is reacting to this by more aggressively marketing their competing service, called PayPal Express. Still, Google Checkout is quickly gaining marketshare (see JP Morgan study that says that it had around 6% in 2006, but it's probably much higher now).

Note, the service has many limitations: no batch processing, limited functionality when it comes to shipping calculations, not available outside of the US, and many others. Check with your shopping cart software publisher to see the exact limitations that apply to your software (if you are a ProductCart user, see Using Google Checkout with ProductCart).

If you are looking for a shopping cart that is compatible with Google Checkout, here is the current list.

My suggestion: activate it on your store. If it doesn't work for you, you can always turn it off. But why give customers a reason to shop elsewhere if they want to earn their bonus (currently $10) by using Google Checkout on your store?

And I'm sure that later in 2007 there will be many more customers that will want to use Google Checkout for all sorts of other creative reasons that Google will come up with. If I were you, I'd add it to the payment options.

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