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Google Checkout Sputtering

Posted on 8.30.2006

Google recently launched Checkout, their answer to PayPal. But early indications are not good for Google. The research division of Piper Jaffray & Co. surveyed 40 large online stores and found that 81% of them would not use Checkout. Many smaller retailers are echoing that sentiment. Problems range from very long processing delays to a general lack of trust.

Some orders can take several weeks to process - not good when customers expect instant gratification onlline. Compare that with PayPal, which can process transactions in minutes. The delays are largely blamed on Google's inability - or paranoia - to properly manage suspicious orders and fraud.

Checkout also captures email addresses and shopping preferences. Some retailers are concerned that their customers will later be targeted by Google. Part of the reasoning for this is that Google requires a user to got through Checkout to change an order, not the original merchant.

Other problems include technical hiccups and that Checkout does not have phone-based customer support. Customer relations are handled by email, which can take a day or more to get back to the user.

According to MarketWatch, Scott Devitt, an analyst with Stifel, Nicolaus & Co. wrote, "This service may not be the PayPal killer many imagined."

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