Google Checkout launched today and is Google’s attempt at the universal wallet. The idea is that you sign up with Google and you don’t have to enter in your credit card and personal information at every website that you purchase from. Google also provides fraud protection against shady merchants, so theoretically, you will feel safer purchasing from merchants you may not recognize.
While this is an interesting proposition, this is a path well worn path by Google’s competitors. Both Yahoo! and Microsoft have wallet products that have been moderately successful, but there are no grand slams here.
Google has made Checkout more consumer friendly than it’s competitors. First, it doesn’t transmit your credit card number to the merchant. Second, if you select the option, Google won’t send your email address to the merchant either. While these features are consumer friendly, this program is not friendly to merchants.
Google’s biggest challenge here will be acquiring merchants who are willing to accept not owning (or even knowing) their customers. Merchants view advertising on Google (and Shopping.com, Yahoo! Shopping, etc) as a necessary evil to acquire new customers, but ideally they would like to convert customers from these aggregators as customers of their own.
Google has one thing going for it: size. Since the vast majority of web merchants derive their customers from search engines and Google is the most used search engine, merchants may have a hard time saying no, especially if Google skewed results in favor of merchants that offered Checkout.
One thing is for sure, the web shopping landscape just got a little more interesting.
[UPDATE: Om Malik has an interesting take on what Checkout means about the CPC business]