Officially eBay banned Google Checkout on the grounds that it does not have a “substantial historical track record of providing safe and reliable financial and/or banking related services.” In response, a Google spokesperson said, “Google Checkout is not a beta product. Google has a long history in billing and payments for AdWords and for premium services, such as Google Video.”
The auction giant has not stated whether the ban is temporary or permanent. Sellers found accepting payments from Google Checkout can result in the loss of PowerSeller status, loss of certain account privileges and even account suspension.
Many analysts initially speculated that eBay would ban payments from Google Checkout because it would be in direct competition with PayPal, and while it doesn’t function quite like it, analysts predict Google Checkout will impact PayPal’s business-to-consumer transactions to some extent.
Consumers that want to use Google Checkout would buy products and services from participating merchants. Online retailers that accept this method of payment have a green shopping cart icon next to its search listing or paid ad spot. Working solely off credit card transactions in the U.S. for now, Google Checkout enables account holders to store their personal information so they don’t have to enter it at each checkout point.
Google plans to distinguish its payment system by tying it into its search engine advertising system. Surfers who enter a search term such as “furniture” will display ads around the search results, though some of the ads will have the icon that signifies the merchant accepts payments via Google Checkout.
“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. “We have learned from users that they don’t have patience for a slow checkout process.”
Merchants who accept Google Checkout pay Google 2 percent of the value of each transaction, plus 20 cents. Existing advertisers get a significant discount. The reduced rate also is an incentive for new advertisers to begin a search engine ad campaign with the Mountain View, Calif.-based company.