Google takes a leading edge over PayPal
According to reports, Google will be eliminating fees from its online payment, Checkout. To compete better with PayPal, Google is letting merchants use its Checkout system to process payments without taking a hit on transactions. Traditionally, merchants who use PayPal take a 2.9-percent hit on the total value of a transaction plus another 30-cents for actually processing a transaction. Over the years, many PayPal users have scoffed at the high fees that PayPal enforces on its customers. Despite this however, PayPal remained a growing and popular online payment service for users worldwide.
Google told reporters that its feeless Checkout process will begin in 2007 with no indication on whether or not this will be a permanent change. Still, representatives from Google made it clear that Checkout was never meant to be a competitor to PayPal. Instead, Benjamin Ling, who is in charge of Checkout said that the service was meant to make it easier for customers to actually make a purchase -- less clicking and fewer sign-in steps.
Earlier last month, Google offered a variety of rebates that customers could use when making purchases, such as $10 off $30 purchases. The promotion was so successful that PayPal quickly announced a similar program for its users not long after.
Currently, PayPal is still the world leader in online payment. The company said that it has roughly 123 million account holders, many of which process hundreds if not thousands of small transactions on a daily basis. Do the math and anyone can see that PayPal's revenue quickly adds up. Google's model to most of its services have always been "free," and it will be interesting to see how Checkout can hold up in 2007 when it too will be free to use. Although Google did not indicated how many account holders it has, the service is clearly growing on a daily basis. Ling mentioned to reporters that "once people use our service, they love it."
Indeed people do love Checkout."I'm thrilled. The online business is really competitive, and every little percentage helps," said Sportscloseouts.com owner Lanny Morton.
"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki
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