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PayPal vs Google Checkout

reviews.cnet.com — CNet compares the differences between Paypal and Google Checkout in a very simple list. Pretty cool.

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  • hyzdufan, on 10/12/2007, -2/+9Well, Google Checkout is fairly new. Of course it's not going to have the number of merchants or vast array of dis-services that PayPal offers...remember when it was x.com?
  • killa2, on 10/12/2007, -10/+5Article with many words without really saying nothing new.

    (yeah, yeah, just like my comments...)
  • mork29, on 10/12/2007, -1/+11I'm hoping that if nothing else, paypal gets scared. There are to many horror stories where Paypal simply doesn't care about customers. It has no real competitors. Even if the Goggle offering isn't able to directly threaten PayPal right now, it'll be enough to wake them up.

    Google has managed to leverage itself into many markets that newcomers had "no hope" in, and generally caused improvement and innovation in each.

    If paypal improves, Google Checkout will likely never be able to gain any real dominance. If PayPal stagnates, then Google will gain another market of dominance.
  • thatsiebguy, on 10/12/2007, -18/+1One Word.... Beta...
    • chesterjosiah, on 10/12/2007, -0/+14Google Checkout isn't Beta.
    • ccanni1028, on 10/12/2007, -0/+1It is not in Beta. They have been using it as a payment system for AdWords and the GoogleStore for a while now.
  • chesterjosiah, on 10/12/2007, -0/+4Eric still holds to all of his previous statements that Google Checkout and PayPal are completely different things. PayPal "holds your money." At any time, you can check how much money you have in your PayPal account. With PayPal, you can send quasi-cash to other PayPal users. None of these are true with GCO. GCO simply stores your credit card information to make it much easier to complete an online purchase.

    Whether Google has plans to give users the ability to store money in their Google Account, allow person-to-person money transfers etc, we can only speculate. Seems to me that GCO was Google's answer to click fraud. They want to change the paradigm from pay-per-click to pay-per-action, and GCO makes pay-per-action much much easier.
    • sdquirk, on 10/12/2007, -0/+2I use PayPal more like GCO. I don't store money in my PayPal account, it only transfers to the person. So in a sense, they can be more similar than people think. I think I prefer this and Google's take on it.
    • Keith0256, on 10/12/2007, -0/+2OK, so PayPal so kindly stores my money for me. Where is my interest that they are earning on this? Think about the millions of dollars of interest they earn off of every ones money.

      Oh, and 100% fraud protection for items over $100. What? I guess maybe on paper, but there are many horror stories. Many even on Digg, like the last revenge story we saw. He had to take revenge because Pay Pal and eBay wouldn't refund his lost money.
    • cquinnd, on 10/12/2007, -0/+2Paypal is not a bank, they make no interest on your money.

      They can assess fees for processing transactions that use your money, and they may be able to claim that the amount of money they hold in user accounts equates to a certain amount of buying power.

      But if they were to start interest bearing accounts, AFAIK that would put them in a position of having to be
      regulated like a normal bank, otherwise they might be in violation of securities law.

  • techiemike, on 10/12/2007, -0/+6I think that Google's service will eventually be better and more widely used than PayPal. Google will make the necessary changes to please its customers and I wouldn't be surprised if the features on Checkout supersede those of PayPal. This article seems a bit one-sided, and I think Checkout just needs time. People have a trust in Google for an unknown reason and Google plans to increase the trust of the consumer, and give PayPal a run for their money.
  • id34, on 10/12/2007, -0/+1Although it seems unfair that PayPal don't accept Google Checkout you have to remember that Google AdWords doesn't use PayPal!

    One thing that happened recently was eBay allowing back the integration of the payment processor NoChex, NoChex is a UK only processor and they got banned along with all the others a few weeks ago.

    The manager at NoChex sent eBay/Paypal a letter asking why, also stating he would take them to court under competition laws, and along with hundreds of complaints on the eBay forums, NoChex have finally been reinstated!!!

    http://www.sellerx.com/category/google-checkout/
    • cquinnd, on 10/12/2007, -0/+1"it seems unfair that PayPal don't accept Google Checkout"

      You mean Ebay doesn't accept Google Checkout.

  • dealgrabber, on 10/12/2007, -5/+1Man, i have been waiting for this day.

    Not only has paypal frozen my accounts, they have done it to many other people i know causing them to lose a lot of business and damaging their biz reps.

    Now, just last night eBay closes my account for "Abuse" saying i did not follow one of the user terms. Looking back, it was probably because I "owed" over $200 in fees. Those could have easily been paid for though and were.

    The fact is that Ebay and Paypal are relatively new companies/start ups and despite their billions in cash, they lack older (i hate to say it), professional staff that really know how to act in a bank/merchantile setting. Thus, you get young ppl on the phone in tha States, but mostly in Indian trying to pinpoint why you account was frozen in the first place.

    Automatic flagging, and IP tracing are inefficient and EVIL. I have advertised with adwords, and question whether or not their is click fraud - sure there is. But, I know that Google or my merchant account will not close me down without atleast "Calling" or trying to figure out more about the nature of my biz. in addition, ebay charges WAY too much in fees, and add paypal fees, it gets excessive and is like usury.

    GO GOOOOOGLE!
  • BubbaJunior, on 10/12/2007, -1/+0No doubt Google will build out the features over time to better compete....the big question is whether they'll be able, or willing, to offer better customer service than Paypal does today for things like fraudelent transactions, users, etc..
  • Nelson69, on 10/12/2007, -2/+0No peer to peer in checkout. That's why ebay doesn't allow it, it's nothing else.

    • DaveF, on 10/12/2007, -1/+2The only thing I use paypal for is sending payments to other individuals when buying things via ebay or online classified ads. Checkout can't replace that until it allows payments between individuals (right now the recipient has to have a web store set up).

  • rustytwonderdog, on 10/12/2007, -3/+2does google checkout allow you to pay without having to sign up for a google account? from what i've read, a buyer must have a google account to send a payment. this is the one thing i like about paypal. i don't need to require a customer on my website to get a paypal account to use it. i can just have them enter their credit card information and off they go.
  • LogicBomB, on 10/12/2007, -1/+0Google tends to weight user feedback very heavily and makes changes (even if just small ones) much quicker than most companies I know of. I'm thinking checkout will start tiny, add a feature here, add one there, until it has some rediculous amount of market share
    • tackle, on 10/12/2007, -0/+1[Quote]Google tends to weight user feedback very heavily and makes changes[/Quote]

      Care to point me to your references?
  • quartzeye, on 10/12/2007, -0/+2What everyone seems to forget is PayPal limits the your ability to purchase on any single card number. Last I checked you could only spend $2500 and can not create a new account that uses the same card number.

    They will lift the limit if you give them you bank clearing numbers. The problem with this is they should never have these numbers. They require them so that the can seize disputed funds from your account. You can go to the bank and whine about it all day long and your bank will not do anything because with the numbers any one can transfer money from your account and it is unrecoverable.

    PayPal does this to protect sellers not buyers and if you dig deep enough you will find that PayPal is not a bank and purports itself to be a Sellers Service not a Buyers Service. Once they have your clearing numbers you have no protection. You sign them away in the T.O.S. If you have a dispute and you tell your card company they will reimburse your account and debit from PayPal. PayPal then siezes the money back from your checking account and holds the money until the dispute is settled. Generally in favor of the seller.

    Hopefully someone will put a micro-payment system together that has the security of a credit card with out the overhead.
    • TheExtendedName, on 10/12/2007, -0/+1Not sure what you mean. The only numbers they ask from me are displayed on every check (routing and account number). Although they are somewhat confidential you can't just take money out of an account with those numbers. So does any one have first hand knowledge of PayPal seizing money from an individual’s bank account? I have never herd of something like that. They can certainly take or freeze whatever money is in your PayPal account but I think that is the limit with out a court decision.
    • Burmask, on 10/12/2007, -0/+1Credit cards are buyer friendly, paypal is seller friendly. Which are you?
    • quartzeye, on 10/12/2007, -1/+1I have not had a problem but I rarely use PayPal. Over on PayPal Sucks the have the horror stories. However you are incorrect on the clearing numbers. Once they have them they can access your account. It is everything the need to wire transfer/debit your account. Same goes true for anyone else with the numbers. The reason it is unrecoverable is that you accepted their T.O.S. and in there you grant them permission to automatically draft from your account. Read the fine print in the T.O.S.

      Go here for additional info.
      http://www.paypalsucks.com/
    • quartzeye, on 10/12/2007, -0/+1Do not forget that PayPal will Fine you $500 dor breaking the Acceptable Use policy.

      From their T.O.S.

      2.8 Liability for Violations of the Acceptable Use Policy. If you engage in the following behavior, PayPal may fine you, as explained below.


      Using the PayPal service to receive payments for any sexually oriented or obscene materials or services in violation of PayPal’s Mature Audiences Policy.


      Using the PayPal service to receive payments for any narcotics, other controlled substances, steroids or prescription drugs in violation of PayPal’s Prescription Drugs and Devices Policy or the Drugs and Drug Paraphernalia Policy.


      Using the PayPal service to receive payments for wagers, gambling debts or gambling winnings, regardless of the location or type of gambling activity.

      You and PayPal agree that the damages that PayPal will sustain as a result of the behavior outlined above will be substantial, including (without limitation) fines and other related expenses from its payment processors and service providers, but may be extremely difficult and impracticable to ascertain. In the event that you engage in such activities, then PayPal may fine you $500.00 USD and/or PayPal may take legal action against you to recover losses that are in excess of the amount fined. You acknowledge and agree that $500.00 USD is presently a reasonable minimum estimate of PayPal’s damages, considering all currently existing circumstances, including (without limitation) the relationship of the sum to the range of harm to PayPal that reasonably could be anticipated and the anticipation that proof of actual damages may be impractical or extremely difficult. You agree that PayPal is entitled to deduct such fines directly from any existing balance in the offending account, or any other PayPal account owned by you.
  • samfrench, on 10/12/2007, -0/+1I don't think google's fees are that much lower than paypal's, so I don't see a reason for most people to switch. I know paypal has terrible support but I suspect a lot of those are isolated cases.
  • mardix, on 10/12/2007, -1/+2Paypal is good to me, and for a lot of other sellers.

    Some people think that they can play the sytem. Paypal has been here for so long, they studied the market, the people, what they do, how they do it, then they create policies to protect them and everybody else.

    Paypal saves your money, and guess what ? It gives you a monthly interest on it, 4.95% yield. The money that you have on Paypal is on a Money Market. And you are earning money each month.

    People knows and trust paypal. If you had a bad experience is because you try to play the system.

    I don't know about Google, they are good for search- but as you can see that's the only thing they are really good at. Because every where they try to stick their nose, it's not working as expected.

    GCO doesn't have no history, and because they may not allow the seller to see the buyer's email, it' s kind of hard to contact the customer if there is a problem.
    The email is just to contact a buyer.

    But hey. Paypal rules. With 100 millions useres, you can't go wrong.
    • JohnChapin, on 10/12/2007, -1/+1> People knows and trust paypal. If you had a bad experience is because you try to play the system.

      No, as a seller I have been very pissed off when a combination of PayPal and Fedex inefficiency have left me hanging for weeks on transactions of a couple thousand dollars because someone used a fraudulent credit card. If Fedex disregards your requests to obtain a signature, which they often do, there is no proof of delivery. No proof of delivery means that if someone uses a stolen card, it now let's PayPal off of the hook for their "Fraud Protection". Which they don't actually do before completing a transaction... They do that a couple of days later... So the only logical course for merchants is pissing off your customers because you have to wait 2 or 3 days to make sure they aren't fradulent because of a PayPal goof.

      > But hey. Paypal rules. With 100 millions useres, you can't go wrong.

      What?! Just because it's got a large user base doesn't mean that the product doesn't suck. I don't think PayPal is totally horrible, but I don't trust them enough to carry a balance either. Saying they have 100 million users doesn't speak to a strength that they have besides acceptance. PayPal is the horse and buggy of electronic cash products, and it's about time they were replaced by something better.
    • fatdog789, on 10/12/2007, -0/+1You mean like Google search? That hasn't been working so well lately either. Nor has Adsense. Or Froogle, which has degenerated into another way to find eBay listings. Orkut's biggest strength is the drug connections users can make in Brazil (and child perv rings that frequent the join). Google Maps still can't produce correct directions for SoCal and is only 50/50 at best outside of NorCal; Windows Live Local and Yahoo Maps Beta blow GMaps away for accuracy and usability and fall short only in the developer APIs...for now. Google News is a random bunch of crap. Gmail...looks nice, and that's about it; storing my email forever is not going to persuade me to ever use their service for anything except throwaway email.

      Really, Blogger and Writely are some of the few things Google's got going for it right now. And they *bought* both of them.

      Just because Google's motto is not to do evil doesn't mean they actually uphold it. Exxon used to pride itself on it's environmentalism and we all know how well that turned out (or maybe not if you hadn't been born at the time of the spill).
  • Burmask, on 10/12/2007, -1/+2Everyone - there is one main issue that was left out. If I use my credit card to make a purchase and I'm mislead and the company won't return the product, then I can dispute the charge and the CC company will side with their users and charge-back the business. Paypal has none of this. If fact, you waive your right to this when using payal. That's why it the only payment service on ebay, because so many people are mislead and are stuck with carp they didn't order. If credit card would be an option, charge backs would happen 20% of the time and ebay would go byby. Google is much better since it allows you to use your current credit card.
    • fatdog789, on 10/12/2007, -0/+2You *can* use your credit card with PayPal. You don't have to store money with PayPal at all, and in fact, when using a credit card, no money is stored with PayPal.
  • trod13, on 10/12/2007, -0/+1Google checkout is new and it's not going to have as many people or as many services for awhile. Thing with google checkout that I don't like is know I have to really complicate my password for my google account b/c if anyone knows that, they can access my checkout account.
  • Zoglog, on 10/12/2007, -0/+1PayPal = Dick in your ass
    Google Checkout = Not quite a dick in your ass yet till Googlebay comes out
  • DevlinD, on 10/12/2007, -0/+1Some people may still be saying that Google is out to eat PayPal's lunch, but there is a very good possibility that GCO really doesnt want to go that route.

    Google owns the ad market, we all know it. They own this market because their search engine commands almost half of the searches performed on the web today, and as a merchant, getting your products and services in front of the largest audience is key to converting sales.

    So as a merchant, going with GCO gives me 2 advantages over another online payment service.
    1) Since I already use Google AdWords, using GCO will give me credits to earn towards my advertising
    2) I am using the payment service offered by the company that has the highest customer base among its competitors, taking into account that my customer is basically anyone searching for something to buy on the web.

    A third minor advantage of GCO is that their rates are also slightly better than PayPal's

    So essentially I am reducing advertising/marketing costs through AdWords discounts and I am (hopefully) increasing revenue by offering a payment system that is integrated with the method the customer used to find my product (much the same way PayPal is to eBay). I dont see any other payment system available that would give me those same potential advantages.

    Google is out to aggregate the world's information including products for sale through the web, not provide a way for joe blow to transfer funds to his buddy. Google started with search and mastered it, then they built AdWords on top of that search and this has now has become their main source of revenue because it was integrated with their already most widely used product. They are doing the exact same thing here by building GCO to work with AdWords, which is take your existing product and add functionality to it that supports the user being able to execute an entire transaction within a single application. If you know that users are clicking on ads because they use the web as a medium for product purchases, why not provide the method of payment as well, its not rocket science.

    But this is why I think PayPal and GCO will live for the most part in harmony...Google just wants to use this as a means for its users to purchase products on the web whereas PayPal wants to be the world leader in online financial transactions, everything from buying on eBay and different websites to performing interpersonal transactions between individuals. There is some common ground there, but overall a distinct difference exists.
  • iSEPIC, on 10/12/2007, -1/+1The fraud section is not correct. Paypal will not refund 100% of your money, nor do they allow charges backs. For instance, if you buy something, and find out once it's delivered it's a box of bricks, so long as the seller can produce a shipping document, you are screwed. Plus, Paypal Limits this to 400.00 anyways. So, with Google you are better protected in my opinion.
    • fatdog789, on 10/12/2007, -0/+1*Credit card* companies handle chargebacks. In this case, PayPal is acting on behalf of the vendor, so they don't get a say in the manner. Just call your credit card company and dispute the charge, and they will handle it for you. Which is why it's always a good idea to use credit cards for online purposes (even if you just use the "generated" temporary card numbers that Discover and some Mastercards offer.
      PayPal acts as an intermediary to reduce the chance of fraud on the part of buyer or seller; for example, by "hiding" the means of payment by the buyer. Would you want some random guy on eBay to know your credit card or bank account #? Probably not, which is what PayPal or GBuy are for.
  • whiterajah, on 10/12/2007, -0/+1One aspect of PayPal that doesn't get much play in these discussions is that it's a viable alternative to a merchant account (which can carry hefty monthly fees) for smaller eCommerce web-sites. If you build a site using VirtueMart, an extension to Joomla, for example, and use the PayPal payment module, it's possible to accept credit card transactions with only per-transaction fees. It looks like this will also be the case with Google, but I'm guessing it will take the developers a while to work up the payment modules.

    A concern is that with integration of Google into the checkout process, they'll know even more about the businesses of their advertisers (already a concern with Google Analytics). Knowing exactly what your sales are would obviously put Google in a position of strength to charge you the maximum amount you can support for advertising through AdWords.

    Incidentally, I'm hoping Google Checkout won't be closed off to countries like Malaysia. A lot of people over there have missed out on opportunities on the Internet because PayPal refuses to issue them accounts.
    • joombph, on 10/12/2007, -0/+0Hello whiterajah,
      To create a plug-in for Virtuemart to use google checkout it doesn't take that long. Our Joomla Community in the Philippines www.joombo.ph has already developed a plug-in that works fine with PHP5 and we are working on it to make it compatible with PHP4.

      My brief opinion about Paypal based on my experience with them: Paypal SUCKS! but I am still using them because there is no good alternative.
      I hope Google will knock them out and I also hope Google will soon expand Checkout to other countries.
  • whiterajah, on 10/12/2007, -0/+1PS I see weapons aren't among the items you can't sell on Google :)
  • joombph, on 10/12/2007, -0/+0Hello whiterajah,
    To create a plug-in for Virtuemart to use google checkout it doesn't take that long. Our Joomla Community in the Philippines http://www.joombo.ph has already developed a plug-in that works fine with PHP5 and we are working on it to make it compatible with PHP4.

    My brief opinion about Paypal based on my experience with them: Paypal SUCKS! but I am still using them because there is no good alternative.
    I hope Google will knock them out and I also hope Google will soon expand Checkout to other countries.
    Regarding your concern about the privacy of the customers. We have added a customer protection feature to the plug-in that makes it possible to send google only a generic item and description with the total amount. This feature is for all who don't want to share everything with google.
  • blackmore74, on 10/12/2007, -0/+0is it possible to implement Google Checkout in a way that avoids sending users to Google?
    Has anybody done that?
  • mcsake, on 10/12/2007, -0/+0There is now a working Google Checkout module for VirtueMart at http://www.powersellersunite.com/googlecheckout.php
  • NGPvladi, on 01/05/2008, -0/+0I don't think any of you guys have idea of what you are talking about! I've been with paypal for a while and google checkout, everybody is trying to control YOUR MONEY and get little bit of your money. When there are millions of customers and you charge them $1 that's millions, so you get the point. So eBay, paypal, GCO they can present them self always better than their competitor, but in the end they are all the same money socking system!!! I dealt a lot with transactions on eBay, Iam Platinum power seller currently on eBay and I noticed 1 thing that always been true, and nobody talks about and or notices it. If you want to be successful on eBay or anywhere on line or in store, it doesn't matter, there is one rule that is true always been and always be, that "Treat others the same way you want to be treated' So that basically includes everything. We always want to sell crap, for a lot of profit and we never want to see a charge back, even though we sent it a week later, but on our website we clearly say that we will send as soon as we get the payment. Plus eBay and other on line stores or websites, are known for sending not what showed on the picture or what says in description. I saw statistics one day that there is more than a billion just in fraud on line, that's how much buyers and sellers lose just in US not counting Europe or Asia. So I deal with over 50 countries in the world, I use pay pal, GCO and Western Union and other services that I will not name, and I never had any charge backs that I lost. I always get tempted when someone pays me with western union not to send it to them, especially from Africa, since Nigeria is considered capital of the world for FRAUD, I know who sells a lot on Internet will agree with me, but I always put my self in his position, How would I feel if I sent someone $1500 via western union and never got anything? I would probably cursed that seller for 2000 years him and his all family. So sellers please be good and "Treat others the way you wanted to be treated" Let that be your modo for 2008 and forever! I do it and let me tell you I am a happy man. I have everything I need! Thanks guys, and sorry if I offended anyone! NGPvladi
  • KenArthur, on 06/02/2008, -0/+0Anything is better than Paypal. Paypal offers no protection to the sellers, I know many people lost money and goods because of Paypal Charge Back Reverse Scam (don't know what is? look up on Youtube). Paypal also holds payments in your account for many stupid reasons such as "if you are on Ebay less than 6 months, and item is sold over $100" along with many many more "reasons" to hold your money, while Paypal makes millions of dollars of interest every day on the holds. So use Google Checkout or Moneybookers if you are a seller. For you P-lovers, shut your mouths until you have been using Paypal to sell something full time for 3 months.
  • Arthere, on 09/30/2008, -0/+0Good read http://www.creditcardassociate.com/paypal.html
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