It may be the king of the search engines, but customers say Google's fledgling online payment system is no match for PayPal.
PayPal was seven times more popular that Google Checkout in 2006, according to a report issued on Wednesday by investment firm JPMorgan.
Based on a survey of 1,100 online shoppers, the report found that 6% of respondents had used Google Checkout compared with 42% who had used PayPal.
The report suggests that Google's typically meticulous attention to the user experience misfired for Google Checkout. "Despite 65% of credit card users and 44% of PayPal users reporting 'Good' or 'Very Good' service experiences, only 19% of Google Checkout users said the same," the report said.
The report recommends that Google "continue aggressive promotion in F'07 to increase product visibility."
Google seems to have taken that advice to heart. The company is offering $10 to new users of Google Checkout. Google introduced the promotion earlier this year and just this week it began appearing on the Google.com page. According to a Google spokesperson, the timing is unrelated to the JPMorgan report.
The promotion is not quite $10 in cash. Google says that upon signing up for Google Checkout, new customers will receive a $10 credit that can be spent at participating Google Checkout merchants. Nonetheless, it's something for nothing more than trying Google Checkout, at least until Feb. 15, when the promotion is scheduled to end. The free $10 vanishes after March 31 if not spent by then.
The report isn't all bad news for Google. JPMorgan found Google Checkout users are younger and more affluent than PayPal users -- a statistic potentially more appealing to online merchants.
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