Online stores that don’t want to deal with their own credit card processing always have a dilemma.  There are many options for payment processing, including online store platforms, checkout vendors and simply processing the credit card orders yourself. Two of the most popular options for online credit card processing are Google Checkout and Paypal.  Paypal has been around for years, while Google checkout has come along more recently.  Each service has some definite pros and cons, which are worth discussing if you are faced with this decision or are looking to switch from one service to the other for your credit card processing. 

The following is a description of how they square off: 

Price: Google Checkout Wins 

Google Checkout wins this battle, and it’s really not close.  They charge 2 percent of the sale price plus 20 cents per transaction, while Paypal charges 1.9-2.9 percent based on sales volume plus 30 cents per transaction.  However, Google checkout processing is free if you spend equal or less than 10 times your Adwords spend.  So if you spend $1,000 in Adwords, your first $10,000 of merchandise processing is free.  For most online e-commerce stores, it becomes almost impossible for Paypal to be cheaper than Google Checkout. 

Customer Trust: Tie 

At this point, the vast majority of online customers know about Paypal.  It has been around for a long time, and most online merchants accept it.   On the other hand, Google has plenty of name recognition as the largest search engine.  If your customers have used just one of the payment methods, it is more likely that they have used Paypal.  Still, Google Checkout is likely a trusted method of payment by your customers because of the name. 

Payment Flexibility: Paypal Wins 

Paypal allows customers to use their bank account for payment, while Google Checkout does not.  As most Paypal users know, Paypal also allows for peer-to-peer payments, which is a bonus for using the service. Both payment services now offer international currency and shipping. 

Miscellaneous: Paypal Wins


As already mentioned, the peer-to-peer payment feature in Paypal can be very convenient.  Paypal’s fraudulent return policy is also good for big purchases, as there is not a time limit on refunds, whereas Google fraudulent purchases need to be reported within 60 days.  Otherwise, the comparison seems rather similar for implementation. 

The Verdict 

Paypal seems to have a few more advantages, but Google Checkout beats Paypal on probably the most important factor: Price.  Google takes out less money in nearly all circumstances, and that is probably the most important factor when choosing a payment service.  Paypal’s advantages are probably not enough to make the two services rank equally. Seth Trachtman is a Web Marketing Account Manager for The Net Impact Web Design St. Louis.My Zimbio
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3 Responses

  1. reena on 24 Jul 2009

    When google checkout launching in India

  2. mathew on 18 Jan 2008

    I really appreciate this SFI Merchant Service because they provides complete solutions about credit card processing like age verification; gift cards; signature capture to prevent chargeback’s; wireless and high-speed processing solutions; ATM machine and POS debit card processing; and more.

  3. slt on 07 Jan 2008

    Amazing analysis.

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