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Crave Talk: Not checking out Google Checkout

Do you really want Google to know about your purchasing habits, and do companies want to lose touch with their customers?

There's hardly an area of the Web that Google hasn't got covered -- search, Webmail, Internet calling, mapping, news, shopping, photos, videos, blogging. You name it, Google's done it. Last week, it expanded into what must have been one of the few remaining un-Googled areas, with the launch of Google Checkout.

Google Checkout is an online payment system that lets people make purchases from participating merchants using a single sign-on. Sound familiar? Well, it's certainly not the first company to try this. Back in 1999, Microsoft launched Passport, an online payment system that aimed to do a similar thing, but it never caught on. Equally, Yahoo Wallet didn't gain traction. But then Google does seem to have the midas touch with everything it launches, with rivals quivering in their boots when it expands into yet another online domain. So the question de jour is, will Google Checkout become widely adopted and will consumers use it?

Quite a few companies, including Starbucks, Levis and Timberland, have already signed up to the system, but it will be interesting to see what happens over the next year or so. It's certainly cheaper than the rival payment system, Paypal, which charges a transaction fee of 3.9 per cent plus 20p per transaction (in the UK). Google Checkout is charging 2 per cent plus $0.20 per transaction, and will give you $10 of sales through Google Checkout for every $1 you spend on AdWords.

For businesses that are already using PayPal or for small stores that are currently dealing directly with credit card companies, it might make sense to migrate to Google Checkout. But bigger online stores, where the majority of consumers shop, probably wouldn't consider Google Checkout as it allows customers to keep their email address confidential, and track orders or contact sellers via Google. How are companies going to build a relationship with customers and target sales if it's all done via Google Checkout?

It's also uncertain whether the general populace will embrace it. Relatively few people signed up to other payment systems such as Microsoft Passport or Yahoo Wallet. The only payment system that has widely caught on is PayPal, but this has a distinct advantage over Google Checkout in that it allows payments between individuals -- for PayPal all you need is an email address, while for Google Checkout you need to have a Web site selling goods.

There's also the issue of privacy -- Google already gathers information from all the other services it offers. Do you really want Google knowing your name and address, and the fact that you buy books about communism, watch pornographic DVDs, eat junk food and are taking medicine to treat thrush? While searches are blissfully anonymous with only your cookie identifying you to Google, you can't stay anonymous when you're buying something. Google was issued with a subpoena by the US government last year to provide information on Internet addresses and search queries, and was forced to give the government limited access to records earlier this year. Imagine what would happen if it asked for information on people that had bought pornography or books on certain topics?
Having said that, most of my friends don't know or care about privacy issues, so that's unlikely to stop them signing up. I think the main stumbling block for Google Checkout will be persuading people to sign up. Many people signed up with PayPal initially because it was the only way they could buy stuff from eBay without faffing around with posting cheques. But with Google Checkout, many stores will continue to offer the choice of buying goods directly with the store (at least that's what they're doing at the moment), so there's less of a push.

At the moment Google Checkout is only available to retailers with a US address and bank account, and to customers with a US credit card. The company says on its Web site that it "looks forward to offering more options in the future", but there has been no hint of whether or when it may be available in the UK.

I do a significant proportion of my shopping online, so am probably a target customer for Google. But I tend to use only a few big online stores (Amazon, Ocado and Expedia) for my purchases, so I don't mind setting up separate accounts with each store. So I, for one, won't be checking out Google Checkout. -Ingrid Marson