Google Checkout Versus PayPal Surveys Are Bunk

Opinion: Recent comparisons between Google Checkout and eBay's PayPal miss the mark by using vague comparisons that are anything but helpful.

The very last thing that an e-commerce customer sees when hes shopping online is the checkout process, and the ease (or difficulty) of that process often determines whether the customer clicks on the final purchase button.

The checkout process happens to be the most challenging for IT. Beyond the listing of the intended purchases, it must navigate discounts, calculate state taxes and shipping charges, make shipping arrangements and process the payment. It also must have inventory access, both to verify that the product is available to ship and to make sure that the inventory is reduced once the order is finalized.

Remember, each of these steps requires interaction with a different database and sometimes with external companies. Maybe a retailer needs to schedule shipments through FedEx or make payments through various processors. It all depends on the selected payment method. Its no wonder that so many purchases are lost during those final seconds, as some glitch kicks in from any of those places.

But given how important numbers are to this process, its sad that numerical comparisons on various final stage services often fall so short.

For example, I noticed this interesting Bloomberg story about how well eBays PayPal is faring against Google Checkout and *sighed* at how weak a foundation it was built on.

First, the story seems to be based on the following statement: "In recent surveys, the worlds largest auctioneer found that less than one out of five users of Googles Checkout online payment service was happy with it." But it doesnt say what those surveys are, who was surveyed, exactly what they were being asked or when the survey was conducted. Its impossible to assess.

According to the writer of that Bloomberg piece, the "recent surveys" reference was actually to one survey and it is almost six months old (released on Jan. 17).

In this fast-moving space, Im not so sure that six months old constitutes "recent," especially given that it looked at Google Checkout when the service itself had only been operational for six months, having been launched in June 2006. Technically, its not clear how old Google Checkout was at the time because its unclear when the surveys were conducted. All we know it that the results were published on Jan. 17.

/zimages/3/28571.gifTo read about PayPals plans to combat phishing attacks on their site, click here.

That survey was conducted by JPMorgan Chase, which is a well-respected source of such data. But the survey was based on interviews with 1,100 consumers, who may not readily know who to blame for a glitch. Therefore, failings that they attribute to Google Checkout might—in theory—be the fault of a site owner that wasnt integrating it properly. Im not saying definitively that this happened in the JPMorgan Chase survey, but there are many good reasons to be suspicious of a consumer survey when the topic is effectiveness of a highly-integrated checkout system.

Beyond the consumer perspective, how meaningful were the figures? Only six percent of the consumers interviewed had even seen Google Checkout, which isnt surprising given its newness at the time. Theoretically, thats 66 users out of 1,100. Of those users, 81 percent said they had "fair to poor" satisfaction levels with the product.

The first problem I see if this: with such a small sample size, it seems bizarre to merge "fair" and "poor." How many of those 53-and-a-half interviewees meant "fair" and how many meant "poor"? The distinction makes a big difference.

When the subject is the checkout system for an e-commerce site and the interviewee is a consumer, one could make an argument that "fair" is respectable. How excited do you think a consumer is really going to get about a checkout system? When rating the local brick-and-mortar, a picture-perfect, flawless checkout would likely get a "satisfactory" or "fair" rating. A consumer would be quick to say "poor" or "very poor" with a bad checkout experience—just ask Costco—but they expect competence and are not likely to give an especially high grade for it.

Now lets take another look at that line from the Bloomberg piece: "In recent surveys, the worlds largest auctioneer found that less than one out of five users of Googles Checkout online payment service was happy with it."

Setting aside that it was one survey and a not-so-recent survey at that, taking the leap from "81 percent said fair to poor" to "less than one out of five users were happy with it" is a stretch. Its quite unclear whether those who said "fair" were not happy with it. For a checkout, "fair" might have been the selection of choice for those who were indeed happy.

And it may not be entirely fair to hold a year-old product to consumer criticisms—assuming they were indeed criticisms—that were collected when the product was much younger.

The survey also doesnt seem to address that Google Checkout and PayPal are very different services, so the comparisons might be like comparing apples to watermelons.

Google Checkout has its issues but I caution people against giving stats weight until the particulars are known. If youre going to address shortcomings, have the specifics to back it up.

Retail Center Editor Evan Schuman has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop any time soon. He can be reached at

To read earlier retail technology opinion columns from Evan Schuman, please click here.

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