What is Google Checkout? (Or why will consumers care)

Here’s how my thinking has developed on this. Google Checkout is Five pieces that work in unison to provide a great (safe, streamlined, efficient) and innovative consumer buying experience:

 

1. Search Badges/Icons - The consumer experience starts on the search engine. Merchants that accept Google Checkout will get a graphical “badge” that shows consumers they can expect the Google Checkout 
2. Unified Checkout – For participating merchants, consumers can now know they will have a single checkout experience vs. having to learn each checkout.
3. Web 2.0 Wallet – By storing your credit card information in your Google account, your payment information (credit card digits) never has to leave google’s systems. Your ship-to information is transmitted via server-to-server encryption so that’s safe as well.
4. Credit Card Gateway – Like verisign or cybersource (or authorize.net, etc.) Google Checkout integrates a credit card processing engine that pulls the info from the wallet, runs the consumer’s card and then…
5. Purchase Monitor – Finally, all of your purchases through the Google Checkout are aggregated in one place so you can monitor the status and review the merchant all in one page. 

 Use case:

Here’s a before and after scenario. Let’s say this holiday between Thanksgiving and Christmas you need to buy 15 things online.

Before Google Checkout:

1. Checkout at X different places. Most likely if you are buying 15 things, you’ll have at least 5 stores to deal with and a max of 15, so call it 5-15. Each checkout is very different.
2. Enter (risky and prone to error) your credit card, bill-to/ship-to, etc 5-15  times over and over and over.
3. Receive and monitor 5-15 different confirmation emails, tracking mechanisms, out of stock emails, etc.
4. Leave feedback/reviews at 5-15 different places.

After Google Checkout:

1. Shop at 5-15 Google Checkout enabled merchants, with the same Google-powered checkout
2. Never have to re-enter your CC/bill-to/ship-to info.
3. Receive and monitor order status in one place
4. Leave feedback/reviews in one easy to use location

The time savings alone on step 2 is huge. Together the Google Checkout experience will easily halve if not quarter the time it takes to buy from multiple merchants.

There are many things Google can do to accelerate consumer adoption. A limited time rebate has been mentioned. Also, think of how many Google Toolbars are out there (according to comscore – google has 48% marketshare). One of the popular features in the Google Toolbar is Autofill  what if there was an update to Google Toolbar that automatically asked if you wanted to move that info into your google account so you can more easily use it in Google Checkout?  Gotta be at least 20-50m people out there using Google Toolbar.

Another clever way to drive adoption is Google Checkout COUPON CODES.  Consumers are CRAZY for coupon codes (just look at the comments section of my blog here).  Google Checkout gives Google and partners the ability to spiff consumers easily with coupon codes.

In fact at launch, google has this online mall that has detailed Google Checkout Coupon Codes ready to go.

Comments

[Steve D]

the best thing about all this is that PayPal will become better thanks to Google effect (Google spends so much on new development that everyone is forced to follow them).

Also, Yahoo and MSN will probably have no choice, but to implement similar payment integration into their own advertising systems. Yahoo already struck a partnership with PayPal (which in my view has been caused to large extend by their insider knowledge of what Google was planning to do). Thus Yahoo will should PayPal icon on the ads and it's also very likely MS will not try to develop payment system and decides take advantage of PayPal too.

So in my view it will be PayPal on Yahoo/MSN versus Google checkout on Google. I personally will switch back to Yahoo search from Google if Yahoo becomes a simple way to search for PayPal enabled merchants (I am a very heavy user of PayPal and Google check out offers absolutely nothing new or attractive to me).

As for me, I checked out Google checkout and since I am a rather heavy PayPal user, I absolutely see nothing atractive about Google payments. PayPal is incomparably more complete solution.

by the way, Google runs their payment system at a loss to themselves (or at least at a cost). They hope it will increase usage of their pay-per-click system. I have not yet read interpretation of this move as they are feeling they need to start giving incentives to advertisers to increase slowing demand for pay-per-click advertising.