Thursday, June 29, 2006

Google Checkout arrives - and it's Microsoft Wallet

Anyone remember Microsoft Wallet? It was a feature of IE 1.0, and I think it was part of Windows 3.1. Microsoft Wallet later became a Microsoft initiative to own identities, and provide a global account that would work across merchants. That triggered quite a furore.

And now the long rumored Google Checkout has arrived. It turns out to be a lot like Microsoft Wallet and Microsoft's identity management initiatives. Google's been owning my digital identity in stages, and now they've made the big leap -- they own my credit card information (AMEX, just to be a little safer). As yet Google is not a bank and there's no eCash/PayPal -- just credit cards. The interesting question is what this looks like for merchants. Do they have to get a standard credit card account or does Google step into the picture there?

Google masks email accounts on purchase, cutting down on corporate spam. That's worth something. The list of supported vendors is pretty small, the biggest is, GNC and Dick's Sporting Goods. CD Universe has a $10 coupon code.

Now that Google has my credit card I am fully owned. I might as well tatoo Google on my forehead. That's the way of the modern world. You can be owned by Amazon, eBay (that would be hell), Microsoft or Google. Pick your poison. Since I don't believe Google is anywhere near as dominant as Microsoft, I'm riding that pony.

In terms of impact, so far Google is clearly competing with Amazon. Depending on what they're doing for vendors they may be after eBay as well. The purchase history screen has a 'review sellers' section, that implies Google will be doing identity and reputation management of sellers. That's where eBay blew it (big time), I trust Google has learned from that.

Update: The NYT fills in the merchant side. eBay is toast (yes!). The Google subsidy will open up eCommerce for items priced between $1.00 to $2.00.
... for merchants, the service comes with a twist: Google will waive some or all of the transaction fees for companies that buy advertising from it. That may give the service a leg up on competitors like PayPal and several smaller companies that help online merchants accept credit cards.

It will also add another entry to the list of businesses that have been shaken up by Google's innovations, a list that already includes publishing, advertising and desktop software.

Google is charging merchants 20 cents plus 2 percent of the purchase price to process card transactions, less than most businesses pay for credit card processing. Banking industry executives say that credit card processors typically pay MasterCard and Visa a fee of 30 cents and 1.95 percent for every purchase, so Google will be subsidizing many transactions.

What is more, for every $1 a company spends on search advertising, Google will waive the fees on $10 worth of purchases. Factoring in the 2 percent fee, that represents a rebate of at least 20 percent of advertising spending.

...Mr. Bresee said Backcountry would have people watching the performance of Google Checkout around the clock.

"If they convert at the same rate, and the fees are lower, we will put up the biggest Google Checkout button you have ever seen," he said.

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