PayPal Has No Answer to Google Checkout
The NYT takes a look at Google efforts to take market share away from eBay’s PayPal. The two are in a battle for the right to process credit card payments of companies looking for an alternative to merchant accounts.
What’s interesting is that PayPal doesn’t appear to be concerned with Google’s onslaught. Despite Google offering free payment processing until the end of 2007 and consumer incentives such as $20 off a $50 purchase, PayPal isn’t responding. Why? Well for one thing, it doesn’t need to…
Checkoutâ€™s gains have not necessarily heralded a PayPal decline. A Goldman Sachs report this week said that based on conversations with various merchants, Checkout appeared to be making gains against traditional payment options and that PayPalâ€™s share of online transactions was also growing.
At first glance, it appears Google’s incentives are part of a plan to simply offer a competitive product to PayPal’s, but Google could also be working to ensure Google Checkout becomes a pay-per-action alternative.
…Checkout gives Google detailed knowledge of its usersâ€™ buying habits, which the company could use to customize the delivery of ads or search results to specific users…the system could make it easier for Google to develop a new advertising model in which advertisers pay only when a user completes a transaction, rather than every time a user clicks on an ad.
Pay-per-action is something that we’ve been expecting from Google for years. It will be interesting to see if it becomes a reality.
Mr. Ling said Google had no plans to tie search results to buying habits or to use Checkout to move to a cost-per-action ad model. But he added: â€œIf there is a service that is of value to consumers, we will consider it.â€
That’s definite “yes” then.