Express pay may be the way

No one likes waiting in line and the Internet is no exception.

Express Payment options from PayPal and Google provide online shoppers with what they're looking for - a secure, hassle-free shopping experience. And they provide advantages to many merchants, too.

Shoppers like eBay's PayPal service because it allows them to purchase online without giving out their credit card number to individual merchants. PayPal accounts are easy to setup and provide shoppers with a single area to monitor all of their online purchases.

According to a 2005 Forrester survey, 43 percent of U.S. online consumers rely on PayPal's services. Of these shoppers, 80 percent say they are more likely to buy from a merchant that offers PayPal, and these are shoppers that merchants desire. Sixty percent of PayPal users are high-net-worth individuals, ages 35 to 64, and 75 percent are college educated.

Checkout the competition PayPal's overwhelming market share is likely to diminish with the introduction of Google Checkout (checkout.google.com). Like PayPal, Google Checkout offers a checkout process that makes online shopping faster, more convenient, and more secure for online shoppers. Google Checkout allows shoppers to complete transactions faster by entering their login information and avoiding the hassle of filling out multiple forms.

Like PayPal, Google Checkout improves a shopper's security by concealing the buyer's credit card number and providing reimbursement for unauthorized purchases. Google Checkout also lets shoppers choose whether or not to keep e-mail addresses confidential or turnoff unwanted e-mail from the stores where they shop.

Early adopters of Google Checkout include Dick's Sporting Goods, Buy.com, and Starbucks. Google Checkout is used by uBid, but prohibited by eBay.

For sellers, competition between Google and PayPal is a good thing. As an incentive to merchants, Google takes a smaller cut of payments than PayPal, which starts at US $0.30 plus 2.9 percent of the total payment. Google requires $0.20 and two percent, respectively. In addition, merchants that use AdWords get a break on these fees. For every $1 merchants spend on AdWords, they can process $10 in sales through Google Checkout at no charge.

Merchant mercy

PayPal and Google Checkout provide some valuable benefits to merchants. Merchants using these systems don't store the credit card numbers of customers. As a result, there is no risk that credit card information provided to your company will be stolen or misused.

Both systems provide a secure turn-key payment system for merchants. Over time, these solutions can be more expensive than operating your own credit card gateway, but they provide an easy way to get online. They also are an ideal means to test online sales volume before developing your own credit card payment infrastructure.

Merchants who provide their own credit card processing can benefit by adding PayPal and/or Google Checkout as an additional payment option. Although it seems redundant, consumers using these services are more likely to buy from you if you accept their preferred payment method.

According to various research reports, typical shopping cart abandonment rates can be as high as 67 percent. Although the reasons for abandonment vary, common reasons include the following: long checkout processes; requiring too much personal information; requiring customers to create site-specific logins; and concerns about web site security.

For many online shoppers, payment services like PayPal and Google Checkout do a good job of lessening these concerns. That may be reason enough to consider using them.



The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.