Sunday, February 18, 2007

Why Adding Google Checkout to eBay is Good for Sellers!

I've written several articles on the PayPal - Google battles over online payments and won't go into those same issues again -- I will add some links to those articles at the end of this post. What I would like to discuss is the need for Google Checkout to be accepted on eBay from a seller's perspective. Remember, I'm The Seller Evangelist so I look at issues from the seller's perspective.

I came across another article on Google Checkout today and something struck me. According to eBay spokesman Hani Durzy "It's our responsibility to encourage payment systems that have a historical track record and desire by community to use it," Durzi said. "Google Checkout has very little historical track record ...we see a very low level of interest." The first part of that statement is funny. Google has had a year to fix the technical issues with Checkout and is now available on 100 of the top 500 shopping sites on the Web and Google itself has a tremendous track record as a company. So that argument is pointless but what about the statement “we see a very low level of interest." The idea that sellers don't have any interest in Google checkout is like saying “Jared, doesn’t like Subway sandwiches” Does eBay really expect us to believe there is little interest in offering this service?

When I was selling I spent close to 4% of Gross Sales -- including S&H -- on PayPal fees and I was getting PayPal’s best rate. The percentage was high because we had a low AOV (Average Order Value) so the 30-cent transaction fee hit us hard as a % of sales. In 2004, my best year on eBay, I spent close to $180,000 in PayPal fees; do you think I wouldn’t have any interest in adding Google Checkout and their no fees promotion?! You have to be kidding me! I would have jumped at adding a no fee option. So the idea that sellers don’t want Checkout is ridiculous but where eBay gets wiggle room is that eBay buyers have shown little interest in adding Checkout. Pardon me, but buyers aren’t interested because they don’t have the option. Give them the option and see how fast they adopt it.

I can tell you this; Google is not going away so at some point they will work out a deal with eBay to include PayPal in Google Checkout in exchange for allowing Checkout to be accepted on eBay. This would be beneficial to both buyer and seller and is inevitable.

Recent articles on the Google - PayPal battles:

And there's new guy coming into the payments area:


Mountie said...

Have to say checkout is not that attractive once you take away the freebies for sellers and buyers. Sure sellers would like it on eBay because it's FREE. But is it actually very good? Checkout is not that different to Microsoft wallet / passport and look what happened to that - not a lot! It's not an emoney system as is PayPal, it's just an e-wallet and as such really has nothing that special to offer..... oh yeah - except that it's free.

Randy Smythe said...

Mountie - this is true! It is only an e-wallet but it provides sellers with an option for accepting credit cards which makes them less dependent on PayPal. BTW free is not a bad thing from their point of view.

If it's only an e-wallet why is eBay preventing it form being accepted?

Mountie said...

Because an e-wallet doesn't provide the same levels of protection that can bet given with e-money systems such as PayPal and Nochex I'd guess. Maybe they will in the future, but the arguements against are compelling as if they allow one e-wallet they have to allow them all, and that's where the trouble starts...

Randy Smythe said...

I think we will have to disagree in that regard. I believe keeping Google Checkout off of eBay is strictly a competitive move by eBay. It is a smart short-term business decision but doesn’t provide sellers with the options they need to grow their business. I may be wrong but at some point Google Checkout will be allowed on eBay and PayPal will be included in checkout. After that, the next target for Google would be Amazon Payments

One Caveat! eBay doesn’t change unless the metrics require it so if Google Checkout can’t get enough traction off of eBay they may not be able to move eBay off of its position. If Google Checkout added account capability like PayPal you would see eBay bending over backwards to get PayPal included in Checkout.