Many industry observers counted Google Inc out of the online
payments business, but the Internet giant is signalling that it
maintains a tantalising toehold in the business, and its sheer size
guarantees that its competitors ignore it at their peril.
Mountain View, California-based Google reawakened its payments
business recently, introducing an online application designed to
automate implementation of its Google Checkout service to handle
payments so that even the smallest online mom-and-pop shop can be
up and running in minutes.
Go deeper with GlobalData
Many online merchants felt that Google was less than committed to
handling online payments, especially after the company launched a
significant price increase that eliminated its long-standing
practice of offering subsidised processing fees to merchants that
also used its AdWords program for online advertising.
By bringing its pricing close to its online payment rivals, eBay
Inc’s PayPal Inc and Amazon.com Inc, it was seen by many as a sign
that Google was reigning in its ambitions in the online payments
market.
The price hike ricocheted around the web, as many merchants vowed
to leave Google for PayPal.
But the migration never materialised at levels mirroring the online
outrage, and Google’s decision to end the subsidies have, no doubt,
helped the search giant ride out the weakening online advertising
market amid the recession.
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By GlobalDataRekindling interest
The launch of the new online tool has rekindled interest in Google
Checkout, which the company has been relatively quiet about since
its launch in 2006. Google has never reported any market
penetration numbers for the service, and company executives have
rarely elaborated on it.
The new online tool is designed for ease of use, with the goal of
making it as simple as a few clicks of a mouse for joining the
service.
The tool allows merchants to link Google Checkout with merchants’
inventory records stored in Google Docs spreadsheets formatted
according to a company template. It also allows merchants to easily
upload images, product descriptions and availability, along with
prices.
Online merchants can embed the tool on a Google-hosted site or on a
blog or other Web site. Checkout stores consumers’ payment card
account data and makes it easy for shoppers to complete purchases
online.
Anjali Vaidya, an associate product marketing manager for Checkout,
wrote in a Google Checkout blog post announcing the newest tool
that “selling online has never been easier – no complicated coding
or technical tasks are required.”
Almost without notice, Google also introduced a ‘buy now’ feature
for the Checkout service in July, designed for sellers of digital
goods, such as downloadable songs or games.
Global marketplace
In fact, across the globe, Google is giving hints that it is far
from ready to concede the payments market to PayPal or Amazon. In
Australia, Google recently gained a financial services license that
permits it to operate Checkout as a “non-cash payment
product.”
According to the product disclosure statement lodged with the
Australian Securities & Investments Commission, Google Payment
Australia will feature an e-wallet service in which buyers can
store their credit or debit card information for easy access when
buying from participating merchants.
Thus far, access to the Australian service is restricted to
developers working on products for the Android Marketplace – the
open source operating system for mobile phones intended to rival
Apple’s iPhone. Australians can access some free Android
applications, but there are restrictions on the countries where
developers can offer their applications for sale. Linking an
e-wallet application with payment functionality would be a huge
step forward for Google, and could create a model it could
replicate in other global markets.
Not content to sit on its market dominance, PayPal is set to
introduce a set of online tools designed to allow merchants to
build a variety of advanced applications off its payments
platform.
Taking a page from Apple’s wildly successful iPhone application
strategy, PayPal is opening up its systems to outsiders to unleash
developer innovation.
Under its new Adaptive Payments program, PayPal will make available
an application programming interface, or API, available to
developers, enabling them to build payments tools that will easily
plug into PayPal’s systems.
As many developers already have PayPal accounts, leveraging that
knowledge base could help the payments service leapfrog the
competition, especially with regard to mobile payments.
PayPal has been working on mobile payments since 2006, when the
firm launched a text-based system called PayPal Mobile, which might
have been a bit ahead of its time. Last year, PayPal built it into
a payment application that runs on Apple’s iPhone. PayPal has also
become the only payment provider for Research in Motion Ltd’s
application store for its BlackBerry devices.
In May, Amazon announced free processing for some clients,
ostensibly to lure disgruntled Google Checkout users. Amazon Web
Services, which covers payments and many other capabilities, is
also a closely held secret when it comes to user numbers; the
company has not reported how many companies use its Flexible
Payments Service, launched in 2007, which also enables third
parties to craft tools for its payments systems.
Finally, no discussion of online giants would be complete without
mention of Facebook Inc’s fledgling payment system, which involves
converting currency to credits that can be used on its Web
site.
The social networking site is about to start testing a major new
expansion to the Gift Shop that will integrate items from
third-party developers.
The move will expand Facebook’s merchant platform beyond the epay
With Facebook tests that are running inside a few applications and,
for the first time, integrate a variety of third-party virtual
gifts into the Facebook Gift Shop.
In addition, for the first time, Facebook users will be able to
purchase physical merchandise in the Gift Shop with Facebook
Credits.
