Google Checkout checks in

update Going shopping online? The search giant wants to sell you on its new payment plan. Images: Google Checkout

A correction was made to this story. Read below for details.

update Google on Thursday unveiled its much anticipated online payment processing system designed to offer shoppers with a Google account a quick way to pay for things.

Web sites and merchants can integrate Google Checkout into their sites as an alternative payment processing method to existing checkout and credit card processing systems, said Salar Kamangar, vice president of product management at Google.

Consumers with a Google account can type their credit card and billing information into Google Checkout once and then pay for purchases thereafter with practically one click on any Web site that features the system, Kamangar said. As things now stand, he said, "If I buy five things from five different merchants I have to fill out five different forms. This process can take three, four, five minutes" for each form. Google Checkout is meant to change that.

Once they've purchased something through Google Checkout, consumers can track their orders through the system, which will be live starting Thursday at Checkout.google.com.

Merchants using the system will be charged a processing fee of 20 cents per transaction, plus 2 percent of the relevant purchase price. Customers who pay for search-related keyword ads through Google AdWords will be able to process, free of charge, transactions that add up to 10 times the dollar amount of their AdWords spending, Kamangar said. Beyond that, they pay the 20 cents plus 2.2 percent. Kamangar said the regular transaction fees are less than those charged by credit card companies, which can be about 1 percent higher.

Expanding on existing system
AdWords customers who use the payment system will have shopping cart icons displayed in their ads so customers will know that they can use their Google Checkout account to pay for purchases.

Images: Google Checkout

The back-end system is the same as what Google has been using for at least a year to allow customers to pay for premium services on its Google Earth, Google Video and Picasa Web services, Kamangar said. Now the system is being expanded to allow any merchant to use it as an alternative payment processing system.

Though Google Checkout is being integrated into AdWords, Google will not track data about which keywords lead to purchases, use such information to modify AdWords auctions or bid prices, or combine such data with its new cost-per-action test ad system , under which advertisers pay only when the ad leads to a sales lead or a purchase, Kamangar said. For now anyway.

"We wouldn't rule that out entirely," he said. "There may be opportunities" in the future.

The Google Checkout service could also be extended for use on mobile devices, but Google is not working on that right now either, Kamangar said.

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Video: Check out Google Checkout
It's a Google-powered shopping application

Any Web site can add Google Checkout as a payment processing method by either cutting and pasting HTML, or Web code, into the site. Large companies and e-commerce and shopping integration providers can also integrate it as an option within new or existing shopping cart systems, as retailers Timberland and Levi's are doing, he said.

Google also is partnering with financial services companies. For example, Google and Citibank will offer customers a co-branded Checkout option that will provide users $5 or 1,000 "thank-you" points for signing up, Kamangar said.

 

Correction: This story gave the incorrect percentage merchants must pay to participate and incorrect information about incentives for signing up for the co-branded Citibank Checkout option. Google Checkout merchants must pay 2 percent of the transaction to Google. Users of the Citibank Checkout option will receive $5 or 1,000 points for signing up.
 

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