Google Checkout is gaining among e-commerce Web sites, but the largest retailers remain wary because they fear sharing data with Google, according to a survey by Cowen & Co.
Cowen surveyed the top 200 e-commerce Web sites and found that alternative payment platforms are catching on. Among the top e-commerce sites, Bill Me Later commanded 28 percent market share with PayPal and Google Checkout representing 26 percent and 13 percent, respectively.
Jim Friedland, an analyst at Cowen, said Google Checkout adoption is growing. Friedland wrote:
Google Checkout is now available at 26 of the top 200 U.S. Internet retailers, up from 15 in January; Checkout is offered by seven of the top 100 retailers, including Buy.com, Toysrus.com, and Blue Nile. While acknowledging that Google Checkout is “still in the early adopter stage,” Friedland reckons that the increased acceptance of the payment system will increase click-through rates for retailers, boost keyword spending and increase e-commerce searches on Google.
Anecdotally, there were hints that Google Checkout has been gaining a bit for months. For instance, GSI Commerce CEO Michael Conn noted that Google Checkout was gaining. GSI provides e-commerce services for Toys R Us, the NFL and other sites. On GSI’s first quarter earnings conference call on April 25, Conn said:
As it relates to alternative payments, they continue to be a very meaningful part of our overall business. I think quite frankly the big winner for us has been Google Checkout and even without the promotion in Q1, the service has really done well for us.
I think our partners overall are really pleased with it, and then we continue to see a lot of momentum and demand from new partners. When we originally launched Google Checkout I think it had eight partners live. I think last time we gave an update I think there were 16 partners live. I think today there’s maybe 25-30 partners live and I think Google has made great progress really penetrating the majority of our partner base.
So I think today there’s no question that Google is the largest of the payment systems and even without the promotion we’re seeing very good adoption with it and are really exciting and are happy, quite frankly, to be the person that launched with them and benefited from this. Friedland’s note and Conn’s comments provide some subtext to what last week’s Google-eBay spat was really about. Google is encroaching on PayPal’s turf so it’s clear that it hit a nerve with a Google Checkout marketing stunt at an eBay conference. However, Google underestimated eBay, which pulled its ads from the search giant. For now it’s advantage to eBay, but Google Checkout could balance the equation in the future. Friedland noted that Google Checkout has surpassed PayPal Express Checkout, which was offered by 10.5 percent of the top 200 e-commerce sites.
While Friedland’s survey is generally positive Google does have some hurdles to clear. Big retailers view Google with caution and that could hamper Google Checkout adoption. "Most of the retailers we have spoken with are interested in offering Google Checkout. However, many are hesitant to share customer data and transaction information with the company. There have been no ‘deal breaker’ concerns, but negotiations between Google and the legal teams at large retailers have been protracted, resulting in delayed adoption," wrote Friedland.
Perhaps the biggest message in Friedland’s survey is that there’s room for many alternative payment systems. Bill Me Later has significant traction since it has lower fees than credit cards and merchants get a better deal on data sharing. Bill Me Later, which is offered through CIT Bank, based in Salt Lake City, and managed by I4 Commerce, has significant share and a low profile.
Source: zdnet.com
Cowen surveyed the top 200 e-commerce Web sites and found that alternative payment platforms are catching on. Among the top e-commerce sites, Bill Me Later commanded 28 percent market share with PayPal and Google Checkout representing 26 percent and 13 percent, respectively.
Jim Friedland, an analyst at Cowen, said Google Checkout adoption is growing. Friedland wrote:
Google Checkout is now available at 26 of the top 200 U.S. Internet retailers, up from 15 in January; Checkout is offered by seven of the top 100 retailers, including Buy.com, Toysrus.com, and Blue Nile. While acknowledging that Google Checkout is “still in the early adopter stage,” Friedland reckons that the increased acceptance of the payment system will increase click-through rates for retailers, boost keyword spending and increase e-commerce searches on Google.
Anecdotally, there were hints that Google Checkout has been gaining a bit for months. For instance, GSI Commerce CEO Michael Conn noted that Google Checkout was gaining. GSI provides e-commerce services for Toys R Us, the NFL and other sites. On GSI’s first quarter earnings conference call on April 25, Conn said:
As it relates to alternative payments, they continue to be a very meaningful part of our overall business. I think quite frankly the big winner for us has been Google Checkout and even without the promotion in Q1, the service has really done well for us.
I think our partners overall are really pleased with it, and then we continue to see a lot of momentum and demand from new partners. When we originally launched Google Checkout I think it had eight partners live. I think last time we gave an update I think there were 16 partners live. I think today there’s maybe 25-30 partners live and I think Google has made great progress really penetrating the majority of our partner base.
So I think today there’s no question that Google is the largest of the payment systems and even without the promotion we’re seeing very good adoption with it and are really exciting and are happy, quite frankly, to be the person that launched with them and benefited from this. Friedland’s note and Conn’s comments provide some subtext to what last week’s Google-eBay spat was really about. Google is encroaching on PayPal’s turf so it’s clear that it hit a nerve with a Google Checkout marketing stunt at an eBay conference. However, Google underestimated eBay, which pulled its ads from the search giant. For now it’s advantage to eBay, but Google Checkout could balance the equation in the future. Friedland noted that Google Checkout has surpassed PayPal Express Checkout, which was offered by 10.5 percent of the top 200 e-commerce sites.
While Friedland’s survey is generally positive Google does have some hurdles to clear. Big retailers view Google with caution and that could hamper Google Checkout adoption. "Most of the retailers we have spoken with are interested in offering Google Checkout. However, many are hesitant to share customer data and transaction information with the company. There have been no ‘deal breaker’ concerns, but negotiations between Google and the legal teams at large retailers have been protracted, resulting in delayed adoption," wrote Friedland.
Perhaps the biggest message in Friedland’s survey is that there’s room for many alternative payment systems. Bill Me Later has significant traction since it has lower fees than credit cards and merchants get a better deal on data sharing. Bill Me Later, which is offered through CIT Bank, based in Salt Lake City, and managed by I4 Commerce, has significant share and a low profile.
Source: zdnet.com
on April 6, 2012, 12:55 pm