Posted April 30, 2007 1:39 pm by with 14 comments

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What happens to a PayPal rival’s market share, when the owner stops providing $10 and $30 coupons? This…

It goes to show, PayPal built its market share by powering e-commerce sites (and eBay sellers) that didn’t have access to a shopping cart and merchant account. Google, on the other hand, tapped big merchants (such as and used coupons to convince consumers to use Google Checkout. When the coupons stopped, the consumers simply went back to using the merchants existing shopping cart – myself included.


  • Aaron

    I suspect that Google could show a significant improvement in the performance of Google Checkout if it found a way to integrate it into its various other services – particularly AdSense. For example, they could offer AdSense publishers the opportunity to roll their

  • I think google checkout still has a lot of potential, and overall, I don’t see any reason for their growth to stop. They are better than Paypal in many areas, and as soon as we started using them, GCO transactions have remained higher than paypal transactions.

    Paypal became huge solely from eBay use, and without something as strong as ebay to push GCO, I don’t think that it will ever compare. Maybe they can make a deal with craigslist or something…

  • I must admit that I, also, quit using Checkout once the coupons were gone. I think it will be very interesting to see where Google goes with Checkout in order to get the growth that they are hoping for but I think it is going to be much harder than they anticipated.

  • Chartreader

    This is probably exaggerated: the peak is in November and December (i.e. gift buying season), where use of online shopping services are expected to spike. It will be interesting to see what happens this holiday season.

  • @Chartreader:
    You need to refer to the other chart in the original article to see that it isn’t necessarily an exagerated peak.

    In this post it states “On average, Google’s share of transactions across these sites had fallen to roughly 8% in March, down from 19% during the holidays.”

    So, this shows that people were using Checkout probably due to the incentives and then went back to using the other payment options. If the coupons were not a factor, then it would be expected that Google’s share of the sales transactions, regardless of traffic levels, would stay at or near the same level.

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  • I just cannot wait for adSense payments to come in through Checkout.

    I have been using G Checkout a lot more recently and it is seamless so come on guys 🙂

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  • While many larger merchants stopped offering coupons, there were still merchants using coupons elsewhere. Our company is still offering a $10 off coupon and we are still receiving a large number of Google Checkout orders. One reason why we have not gone to accept PayPal and Express Checkout, is that the benefits being offered are no where the same as GCheckout. The best I can get from PayPal is 6 months of free transaction processing. Their “free” isn’t really, merchants have to pay the processing fee 1.9% or higher, then they will be refunded at the end of the month.

    At least when GCheckout stops offering free processing, I will still get a certain amount processed for free by advertising with Google AdWords. PayPal and Yahoo need to make a better benefit program than a copycat blue shopping cart icon and their “free transaction processing” for 6 months.

  • Dale CHapel

    I guess I understand the incentives — but aren’t merchants just selling their customer base cheaply? I would never give Google or PayPal my customers for $10 each. Every single on of these customers can already pay me via my merchant gateway — they all have Visa or Mastercards — or they wouldn’t be able to get Google checkout or PayPal anyway.

    I’m interested in the payment options that add customers — so far I like PaidByCash — it gives me customers I couldn’t get to otherwise. E-Check is pretty good as well.

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  • I love google checkout, it is the only merchant I use to accept payments and have NEVER had a problem with them at all!

  • The real acid test will be what happens in January when GCO is no longer free to merchants. Will they want the headache of multiple payment gateways when they have to pay full price, or will they revert to just using PayPal? We’ll see.