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...

7 Comments:

At 2:33 م, Blogger snudgie said...

I have to agree with this post, because the bottom line is acceptance of the system by the consumer.
It won't help Google or any other upstart company to read ebay's new accepted list of payment methods and suppliers of such services.
Google checkout and araft of others are significantly barred from any form of ebay payment function.
Here's the list of ebay's banned suppliers, it reads like a novel.
AlertPay.com, anypay.com, AuctionChex.com, AuctionPix.com, BillPay.ie, ecount.com, cardserviceinternational.com, CCAvenue, ecount, e-gold, eHotPay.com, ePassporte.com, EuroGiro, FastCash.com, Google Checkout, gcash, GearPay, Goldmoney.com, graphcard.com, greenzap.com, ikobo.com, Liberty Dollars, Moneygram.com, neteller.com, Netpay.com, Nochex.com, paychest.com, payingfast.com, paypay, Postepay, Qchex.com, rupay.com, scripophily.com, sendmoneyorder.com, stamps, Stormpay, wmtransfer.com, xcoin.com

Here is the list of the chosen few that pass ebay's muster.

Allpay.net, Bidpay, Canadian Tire Money, cash2india, CertaPay, Checkfree.com, hyperwallet,com, Moneybookers.com, Ozpay.biz, Payko.com, Paymate.com.au, Propay.com, XOOM

To those in Canada, did you ever think that you would see the day that Canadian Tire money would be an acceptable form of currency for international trade?
Retail store scrip is now legal tender for transactions on ebay?
The head honchos at ebay must be crying with laughter...

 
At 1:11 م, Blogger Quickregister Link Exchange said...

Umair,

I took a look at your post
regarding merchant billing .

You are invited to place a link to
your blog on our website for free. See:

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We get over 18,000 visitors per day.
Many are looking for merchant billing
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Your listing will be spidered by the search
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We hope you take a moment to take
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The Free Advertising Forum.

 
At 7:17 م, Blogger Quickregister Guy said...

Umair,

I saw your post
regarding offshore accounts .

You are welcome to place a link to
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The Free Ad Forum is a forum where you may
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The Free Advertising Forum.

 
At 11:56 ص, Blogger Michael Hamburger said...

I am so grateful to see there is finally a real alternative to PayPal. I have not been a PayPal fan & find PayPal to be only viable for small ticket items, subscriptions or ebay transactions. It is too hard to get your money out of PayPal - who wants a monthly limit to the amount of money you can withdraw or be forced to use a debit card to buy other stuff??? Who wants the hassle of slowly withdrawing your money?

I love the incentives for AdWords users! I have been using AdWords to effectively grow my business over the past few years. Now Google is rewarding me for services I already use… it is a win win. I continue to grow my business & get to process my orders through Google Checkout. It appears I may have to FIRE my merchant account provider now due to the fees they charge. This is a HUGE savings annually.

I have begun to use Google Checkout for my mid-ticket items & it seems flawless thus far!

Thank you Google!

 
At 5:28 ص, Blogger Walidov said...

أزال المؤلف هذا التعليق.

 
At 7:04 م, Blogger shannon said...

i might be the only one that actually feels like paypal has improved greatly as a credit card processing solution? i really don't mind paypal at all, the fees are next to nothing, comparably; and their reputation for buyer AND seller security both , i find,is really reassuring to potential customers.

 
At 3:29 ص, Blogger Zahid said...

Google checkout is great but still paypal has more advantage like they are accepting payment from 55 countries and google only from two.

 

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