The long-rumored Google Checkout was released today. Though nearly everyone said it would be a direct Paypal competitor, it lacks any user-to-user "bank account" transaction functionality and is basically a shopping cart service, but one with some compelling features. (Watch the flash tour here.) The most interesting aspect of Google Checkout is how it integrates with Google Adwords (their several billion dollar a year ad program), giving merchants an easy way to manage transactions as well as letting Google keep merchants honest and add an extra level of trustworthiness to Google Adwords. When you see a green shopping cart icon in an Adwords ad you'll know that Google is handling the transactions for that seller and that you're protected. Rather than create its own shopping portal, Google is trying to integrate the shopping process directly into its search results.
Here's the page for sellers. You can sign up without buying Google Adwords, but the incentive is strong:
Process sales for free. For every $1 you spend on AdWords, you can process $10 in sales for free. For sales that exceed this amount or if you don't use AdWords, you can process them at a low 2% and $0.20 per transaction.
So on a $10 CD sale Google Checkout would charge me 40 cents and Paypal would charge me 59 cents. But if I spend a dollar on Google Adwords, Google Checkout charges me nothing for that transaction. That's a big incentive as I'd be thinking about giving Adwords a whirl and know that I'm getting something in return even if the Adwords results in nothing.
Would I sign up for Google Checkout? I think so, but of course sellers currently have to be residents of the United States so I'm out of luck. Hopefully they'll expand that soon.