Google launched a much-anticipated online payment system in the United States, in a move that could break PayPal's stranglehold on the market.
The US Internet juggernaut touted Google Checkout as a way to make online shopping "faster, more convenient and more secure."
"By integrating the checkout process with search and advertising, we're helping our
users complete the cycle of searching, finding and buying," Salar Kamangar, Vice
President of Product Management at Google, said in a release.
"Many shoppers decide what they want to buy by using search, but in the end they often
don't complete the transaction online because they find the checkout experience complex,
inconvenient and uncertain."
Checkout simplified online payment transactions for customers and merchants, according
Shoppers can create password-protected Checkout accounts containing contact information,
shipping address and payment preferences, and then use the accounts to shortcut the
online buying process at participating websites.
Checkout logos will be placed on AdWords advertisements and on sites of participating
merchants, the company said.
The payment system tracks what people buy and provides purchase history summaries that
include details of orders and shipping status, according to Google.
Checkout offers security features that let people consummate deals without merchants
learning their credit card numbers or e-mail addresses, the Mountain View, California,
Google offered an incentive to AdWords advertisers, allowing all or portions of their
sales free of charge.
The service was launched in the US market late Wednesday and Google was working to roll
it out to merchants internationally, the company said.
Industry analysts contended that Checkout was a frontal assault on reigning online
payment system PayPal, owned by Silicon Valley's eBay. Some had even dubbed Checkout a
"It could be quite a big deal if it is something that gets adopted by merchants and
consumers," said Greg Sterling of Sterling Market Intelligence in the San Francisco Bay
Earlier this month, Google Chief Executive Officer Eric Schmidt contended that his
company's payment system was "Not like PayPal at all" because it targeted advertisers
instead of online shoppers.
Checkout and PayPal could co-exist as online payment options just as credit cards such
as Visa and Mastercard are payment choices in traditional stores, according to Sterling.
"The question in my mind is whether consumers will use it in large nubers, and that is
all about the trust factor," Sterling said. "The key is perception of security and
Google promised to stand behind transactions and "make someone whole" if there was fraud
or problems with a sale, according to Sterling.
Checkout rewarded advertiser loyalty and promised to provide information enabling Google
to better target ads. The system was also another way for Google to go beyond being an
Internet search engine, Sterling said.
US Internet giants Yahoo and Microsoft have both offered online payment services that
didn't catch on.