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Google Checkout gaining ground over PayPal Express

Jun. 22, 2007

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According to a new survey by analyst Jim Friedland of investment firm Cowen and Company, eCommerce store front owners and eTailers are allowing their customers to pay for their purchases with Google Checkout, and this trend seems to be increasing rapidly. In fact, overall adoption would be greater were it not for some concerns on the part of retailers about sharing their transaction data with Google.

Overall, 26 of the top two-hundred eCommerce merchants, or about 13 percent now accept Google Checkout, up from fifteen less than six months ago, Friedland says. These numbers are based on a study of the top two-hundred eTailers as identified in the Internet Retailer Top 500 Guide.

Friedland reports that, on average, 7 of the top one-hundred eCommerce retailers accept Google Checkout today, compared with four in January, and nineteen of the second hundred, up from 11 five months ago.

This pushes Google Checkout ahead of the similar checkout option PayPal Express of eBay offers.

Overall, about 21 of the top 200 retailers, or 10.5 percent, accept PayPal Express Checkout, up from fifteen less than six months ago, according to the Cowen survey.

But there are a few problems. Many of the largest retailers who are interested in offering Google Checkout are a bit hesitant to share customer and transaction data with Google, Friedland says.

“There have been no deal breaker concerns, but ongoing negotiations between Google and the legal teams at large retailers have been protracted, resulting in delayed adoption,” added Friedland.

On average, about 52 of the top two-hundred online merchants accept the basic PayPal service that allows consumers to make payments via direct debits to their bank accounts or on their credit cards. Those numbers are up from forty-five of the top two-hundred eCommerce operators about five months ago.

Friedland added that the main users of PayPal at merchants other than eBay are those who use it on eBay’s auction sites. PayPal recently reported that 61 percent of its payment volume was on eBay itself.

eBay has almost 83 million active accounts, and PayPal approx. 35.7 million, Friedland reports.

PayPal Express Checkout and Google Checkout both require consumers to register in advance with their payment information and personal information. Then they can pay by clicking on that option and entering a password, speeding up checkout and shielding card numbers from retailers.

Friedland added that both checkout systems allow payment with credit and debit cards, while PayPal Express Checkout also allows consumers to choose the PayPal payment option.

There are reports of strong and growing adoption of Bill Me Later, a payment service from I4 Commerce Inc. that performs a quick credit check and then bills approved customers for the purchase amount, said Friedland.

Overall, 56 of the top two-hundred retailers now offer Bill Me Later, up from fifty-three at the beginning of 2007, Friedland reports.

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Source: Internet Retailer

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