Google Checkout and PayPal fee war escalates
By Vivek | November 9th, 2006 at 12:10 am ET
Although we don’t have any statistical information for Google Checkout’s penetration into PayPal’s monopoly market, Google is making dedicated efforts to establish itself as a dominant player. As the shopping season is approaching both Google and PayPal are on offensive to grab/retain market share.
Google Checkout today launched a new promotion in which Google Checkout merchants will receive free processing for all of their Checkout sales. This offering overrides the earlier promotion by Google where for every $1 of Adwords purchase by merchant Google was processing $10 in sales for free through Checkout. The new promotion from Google will be starts from today and end on 31st December 2007.
On the other hand, PayPal’s new promotion offers free shipping and cash-back to customers at over 100,000 sites including eBay.com, Buy.com, Barnes&Noble, and TigerDirect.com. Customers who will register for this offer will also receive cash back rebate up to $20 from the participating PayPal merchants. This promotion from PayPal begins from November 23, 2006, and will be till the end of the year.
Interesting point about these offers is that while PayPal is directly targeting the consumers, Google Checkout is offering incentives to the merchants. I am not sure how this strategy will play out in case of the sites where both PayPal and Google Checkout are offered as the payment services. At any such store, customer will definitely opt for PayPal, unless the store offers different pricing for Google Checkout users or the site offers free shipping from it’s own side, and customer has already realized the $20 PayPal cash-back offer from some other merchant. There are quite a few other possible cases that can take into the transaction processing fees of Google and PayPal. Personally I feel customers really like those offers where they get the cash in hand instead of relying on the merchant to pass-on the savings which are 2.0% plus $.20 per transaction in case of Google Checkout.
on December 6th, 2006 at 3:45 pm
[…] Take another case of Google Checkout which has been promoting heavily to gain market share from PayPal. Google Checkout in now processing all Google checkout sales for free until end of 2007. Google had initially launched the holiday promotion that was supposed to last only till the end of 2006. According to traffic stats from Hitwise, after the launch of initial promotion visits at Google Checkout have gone up by 158% for the week ending 11/25/06. It is still not sure how much those visits really mean in terms of revenue to Google. Still better results mean more promotions to grab even more market share from PayPal. […]
on January 15th, 2007 at 3:08 pm
[…] Related:Google Checkout and PayPal fee war escalates […]
on January 17th, 2007 at 4:46 pm
[…] Related:Google Adwords Team reacts to ad placement controversyGoogle Checkout and PayPal fee war escalates […]
on April 12th, 2007 at 10:43 pm
[…] Related:Google Checkout and PayPal fee war escalates Tags: […]
on April 13th, 2007 at 11:10 am
[…] As I had written last night, Google has officially gone live with it’s Checkout service in UK. The UK launch comes with pretty much same freebies as in US, where merchants can process their Google Checkout sales for free until 2008. After that date, Adwords + Checkout part kicks in where merchants spending £1 on AdWords each month, can process £10 in sales/month for free. Similar deal has been going on in US since last year. […]
on October 13th, 2007 at 6:54 pm
I really hope that PayPal finally get some competition.. Great story by the way!
brad
http://www.calculatepaypal.com