07 Jul, 2006
Ebay bans use of Google Checkout - an Experienced Ebay Seller Perspective
Posted by bknapik 22:50 |
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E-Commerce
In late June Google announced the availability of Google Checkout. Google Checkout is a direct competitor to Ebay's PayPal. Before Google is even given a chance to show its potential, Ebay has taken action to block Google as a payment option for Ebay auctions. Ebay cites that Google does not have proper fraud measures in place. Whether this is true or not is yet to be seen.
As an experienced seller on Ebay, I can say that Paypal does not have excellent fraud measures in place itself. Ebay has the erroneous notion that fraud can only be committed by the seller and not the buyer. Ebay makes it extremely easy to shut down a seller. With a simple form, a buyer can lock a sellers Paypal account, preventing the seller from receiving, sending, and transferring funds. There have been hundreds of reported cases where the seller have been screwed out of money because the buyer was dishonest. Even a tracking number from UPS is not enough to prove a case. This is especially true with high value items such as jewelery or computer equipment. In my opinion, Google has a far better reputation than Ebay. Ebay over the past few years has become increasingly greedy - it is becoming more and more difficult to turn a profit due to the rate increases.
It is quite clear that Ebay is trying to secure its place with Paypal. Google is the only company that can go toe to toe with Ebay. Google has a reputation for offering their services for free and making their dollar on advertising - Google has brilliantly pulled this off again. To quote the Google Checkout Merchant Page
"Process sales for free. For every $1 you spend on AdWords, you can process $10 in sales for free. For sales that exceed this amount or if you don't use AdWords, you can process them at a low 2% and $0.20 per transaction."
This essentially knocks Paypal out of the park. Currently, Paypal wants 2.9% + a $0.30 transaction fee. Google can be free for advertisers or as little as $2% + a $0.20 transaction fee.
I wish Ebay luck with their little restriction, I doubt it will hold. Ultimately, the consumer will decide who wins. Google has the capital, resources, know-how, and reputation to give Ebay a run for its money.
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