Auction site won't allow customers to use new online payment system

eBay customers won't be able to use the newly launched Google Checkout service to buy products, according to the auction Web site.

Google Checkout is now listed among other payment services such as Netpay.com, Qchex.com, ePassporte.com, and BillPay.ie that are not permitted on eBay.

The Google offering lets online shoppers store credit card and address information with Google so that they don't have to re-enter the same information each time they buy an item from a different Web site.

At the time of the service launch, in late June, Google took pains to insist that the offering would not compete with PayPal, the online buying service that is owned by eBay.

Attempt to Fend Off Competition?

eBay did not return calls requesting details about why it is banning Google Checkout but an analyst says that the potential competition to PayPal is likely to blame.

"I think there's only one answer here which is [eBay is] afraid for the competition," said Jaap Favier, a vice president at Forrester Research. "Google Checkout could be an enormous threat for PayPal."

Even if the current Google Checkout service doesn't exactly compete head on with PayPal, it could in the future. Favier expects Google to become increasingly active in e-commerce in the longer term and it would make sense for Google to boost the Checkout service to offer more capabilities that could make it similar to PayPal.

On the eBay Web page that describes its acceptable payment policy, it says that when new payment services arise, eBay will evaluate them to decide if they're appropriate. Some payment services may not be permitted on eBay although they may be appropriate services for consumers in other contexts, the page says.

The page also says that eBay considers a number of factors to determine which payment options will be accepted including enough financial, privacy, and fraud protection; the identity, background, and other business interests of the payment service provider; and the regulatory status of the provider.

Original Article

On Thursday, Google is launching its buying service, Google Checkout (known previously by Google watchers as Gbuy). It is going to make purchasing easier for Web users. You'll just enter your credit card billing and address information once, and then on any commerce site you go that's Checkout-enabled, you won't have to enter your data again.

This is not much of a competitor to eBay's PayPal, as some have predicted. Checkout is designed for serious merchants more than for individuals unloading old Star Trek snow globes on eBay. To be sure, the few merchants that are considering adding PayPal as a payment option (and that don't already have it) might divert their energies to signing up for Checkout. However, there's no reason a commerce site couldn't offer both PayPal and Checkout, if it desired.

Checkout is, however, a huge threat to Amazon.com. The biggest thing the online superstore has going for it is convenience. Once you buy an item on Amazon, buying the next one is a one-click affair. But go to another store, and you've got to enter your credit card info all over again. Amazon wins for convenience, and over time, it's earned buyers' trust.

Will people trust Google? I bet they will. Google will push its high-end partners--Buy.com, Starbucks, Timberland, and Levi Strauss are all part of the launch--and the Google Checkout logo will appear on AdSense items from these and other vendors. This flag will take on a Visa-like pervasiveness. If Google is good enough at handling dispute resolution, people will come to trust it, they'll enjoy its convenience, and Amazon's value-add will be thwarted by 10,000 other stores all sharing one payment system.

Stores will pay Google a small fee for their transactions. This is a potentially gigantic revenue stream for Google, but more importantly, if successful, no other online company will end up knowing as much about the spending behaviors of online consumers as Google. This data is no doubt going to go toward making online ads even more targeted and effective (and thus possibly more expensive), which will also add handsomely to Google's income.

For this reason, I think the Checkout fee structure is backward: Google should be paying its merchants for the privilege of capturing all their transaction data, rather than charging them for each transaction.

Link

eBay has come in for a lot of criticism for its decision to exclude Google Checkout from the online marketplace's list of accepted payment methods. But a number of folks have noted that perhaps the criticism is premature. For one thing, it's undeniable that Google Checkout is unproven in terms of reliability and fraud protection, and there's no reason to assume at the outset that there won't be problems. Probably can't blame eBay for being cautious. One ex-PayPal employee lists several reasonable reasons for eBay to wait and see.

What's more, Google Checkout doesn't allow PayPal as a payment method. Hmmm. One would hope tit-for-tat doesn't determine policies, but clearly Google isn't completely open either, even for a payment system that actually is proven (if not perfect).

That said, my clear impression from folks at eBay is that the timing for allowing Google Checkout as an accepted payment system will coincide with a cold day in hell. If in fact Google Checkout checks out and proves not to have fraud or other problems after a few months, and eBay still hasn't approved it, then you'll know what's really at work here. Until then, eBay deserves some slack.

Original Article