Google Checkout continues to struggle through early growing pains.
According to two surveys by analyst company Piper Jaffray, 81 percent of online retailers say they won't implement Google Checkout. The reason: Retailers don't want to cede customer ownership to Google. And 10 percent of companies surveyed said that Google Checkout would provide Google with too much insight into their business, especially with regard to Google search-related conversion rates.
"Our discussions with more than 40 online retailers who have either evaluated Google Checkout or are currently using Checkout indicate that the widespread adoption of Checkout will be gradual," wrote the analysts, who gathered their data, in part, at the 15th Annual eTail Conference in Philadelphia last week. "Google must address the operational and strategic issues that have arisen since the launch of Google Checkout."
Piper Jaffray analysts predict that Google Checkout will eventually become successful, but that it's large scope means it will grow slowly.
Online retailers did have some positive things to say about Google Checkout. Some indicated they are receiving better conversions and are pleased with the transaction processing cost savings. Some retailers said they were encouraged by the intangible benefits of being associated with the Google brand.
But those factors didn't convince Levi Strauss & Co., however, which last week became the first big brand to discontinue using Google Checkout. Levi.com will no longer offer the service, although it is still available on Dockers, one of the company's properties.
Google Checkout is also facing intense competition from eBay, which announced in July that Google's payment service would not be allowed in eBay's online auctions. eBay owns PayPal, the world's largest online payment service.
Google continues to make improvements to Checkout in response to feedback.