السبت، يوليو 01، 2006

Google Checkout vs Paypal

Source : http://rogeliochoy.blogspot.com/ bully.gifeBay Strategies reported that an eBay employee, Rogelio Choy, "talked smack" about Google's GBuy in a recent blog post. When I went to the employee's blog, no smack was to be found, just this nice little post:
Just want to remind folks who read this blog. Any and all posts that I write about are completely my personal opinion and are not representative of eBay's view, opinion or perspective on any subject matter. Apologies for any confusion on this.
A mystery! I like mysteries!
So I went back to eBay Strategies and found an update saying the post had been removed but the blog was cached in a zillion places and if you look here, you will find it. I looked and found it and below you will find the deleted post for your reading pleasure: GBuy vs. Paypal
I find it amusing how the general media is claiming GBuy will be a significant competitor to Paypal based on GBuy having near zero buyers actually using the service vs over 100MM using Paypal. Let's recall something here folks. In its current form, GBuy is a glorified merchant account. By making GBuy free based on Adwords usage, the service might attract any number sellers who use keywords to generate business. (Please explain why this is any different than offering Internet Explorer free with MS' OS?) There are probably hundreds of thousands of sellers who use Adwords, and saving 2% on transaction fees while paying some materially larger % of sales on Adwords will generate seller interest. But let me make something clear... (clears throat) Until BUYERS actually accept and trust a payment mark en masse (ala Paypal or American Express), merchants won't adopt that mark en masse. The failure of Yahoo! PayDirect or numerous other payment services wasn't lack of seller interest. Yahoo! had tens of thousands of sellers using its payment mark for Yahoo! Shopping while other payment services offering cheaper rates, giveaways, affiliate payments, etc, were legion. The killer was the complete absence of consumer/buyer adoption. Paypal's success was based on a lack of payment substitutes for millions of eBay marketplace sellers. Individuals who were selling on eBay had no access to opening a merchant account (and therefore no access to credit card payments). Paypal allowed millions of sellers to enable credit card/Paypal transactions for commerce on eBay, millions of sellers with billions of sold product listings. Buyers adopted the service because 1) it was free between Paypal users and 2) (no surprise) to buy those billions of listings. Over time, buyers placed an implicit trust with Paypal as a result, allowing Paypal to integrate to their financial accounts (whether via bank or credit card) to make buying all those products easier. Paypal become a payment standard on eBay long before eBay acquired the company (at the expense of eBay's own payment service, Billpoint). Simply, this trust was hard won. Since GBuy is not a stored value service (ala Paypal), it has clear substitutes, competing directly with the merchant accounts of its advertisers. There are few 'individuals' leveraging keywords as a method for one off sales (and sorry, GBase is far far far from that reality). The real question is whether GBuy will be offered for free to integrate to a merchant's own site, when there is no (or limited) Adwords revenue being generated by said merchant on said sale (i.e. an online seller captures a buyer from Adwords but repeat purchases from that buyer are sourced directly on the merchant's site). I have some serious doubts that is even possible. Ultimately someone needs to pay the 2% piper (what Visa and Mastercard charge Paypal and Google for enabling credit card payments) and that feels like a money pit waiting to happen should GBuy head in that direction. But if GBuy doesn't go this way, the number of transactions that will go through GBuy is limited to 1) those merchants that openly choose to manage two different payment flows and 2) sales accompanied by keyword click revenue. Simply put, these don't equal billions of transactions or millions of end consumers adopting the GBuy standard. Merchants will always prefer to be the merchant of record by maintaining their own merchant account (vs having Google be the seller of record via GBuy). Without that community base, GBuy is simply Greenzap with a 'better' (more evil?) seller proposition...

Google Checkout is out

Google has atlast launched its checkout service, discussed for so long on internet by the name of "GBUY". The service is name "Google Checkout" and is out there ready for use. A potential thread to Paypal as there rates are quite cheaper than paypal. Moreover The system is beautifully merged with Adwords, a progrm used by advitisers to give ads on google searhces and other sites featuring adsense. One thing not so cool is that this service is avilabler only for usa buyers and sellers. A potential bottle for google checkout system.