Monday, November 20, 2006

How To Use Google to Sell Downloadable Goods, Part 3: Google Checkout

This is the 3rd installment in the series of How To Use Google to Sell Downloadable Goods. The previous post, discussed setting up and using Google Analytics in your website. This installment will cover the basics of using Google Checkout to sell your downloadable products.
I have actually already covered How To Sell Downloads with Google in a separate post related to using our PayLoadz Digital Good eCommerce service, so this post will cover some things not listed there.

Everyone loves teh Google. Whether that is a good or bad thing, it is hard to argue that they have hit some home runs in the past with their product offerings. Though, they have had some not-so-great efforts as well. Their ambition to tackle the online payment space was a particularly bold move, but one that was welcome by many merchants online who were faced with either complex integrations, or choosing from the small oligopoly of available providers like PayPal and their second tier competitors like 2Checkout or e-gold. Google has always claimed that they would never create a system that was intended to do battle with PayPal head to head, but a few months after launch, that is exactly what they seem to be doing. This has resulted in a promotion battle between the two companies by providing incentives to anyone that uses their services for the holiday season. Good time to be a seller online.

The fees for Google Checkout are roughly the same as many other services when they do have them in 2007. No fees for their current promotion through the holidays. The big advantage with Google in terms of their fees is that for every $1 you spend in AdWords advertising, you can process up to $10 in sales for free. For many sellers, this means they will never pay transaction fees for selling with Google Checkout. Here is GC's marketing pitch to get you to sign up.

Integrating Google Checkout is much like integrating PayPal in the most simple scenario. Create a product using a web based form method and you are generated some HTML code to use in your site. Great. For people selling a low volume of tangible goods, this is fine and should be added to their site without a doubt. However, for larger sellers, or for digital good sellers that require automated processing via backend scripts and communication between their servers and Google's, it is a bit more complex. Google does have a system similar to PayPal's IPN system which provides instant, server to server, notification of all payments and details. They call theirs a Callback page. The big difference between the two systems, is that they require you to use SSL on your page meaning you need access to a secure server. This is not as big of a deal as in times past since many hosting companies are providing secure storage to place their files in. The tough integration requirement is their requirement for your Callback page to use Basic HTTP Authentication to protect it. Google will pass the merchant_id and merchant_key value pair back to your Callback script and your server is required to use Basic HTTP Authentication to check the values passed and only allow access if they match. I am not 100% sure, but I am fairly certain that their system will still send over the information if you don't use HTTP auth. I just know their documentation says it is required, so if they find out, they may give you some grief on it.

Using their API, a seller can add information to the customer's Google Checkout account. The first thing they can add is tracking information. Pretty cool. We actually use their Add Tracking API call to add the download lookup page URL of our system (they list the normal shipping providers, so this is a cheap hack to make it work for our purposes).

Another peice of information you can add to their receipt is a Seller's Note. You can basically enter anything you like. We use this section to add the actual download location link. The customer is sent the note via email as well when it is added to the order. Very cool.

In addition to the tracking and note, you can add a Seller's Transaction Id to their receipt page. This is a great way for a seller to add their own internal order id into the system. It makes customer support easier if they can provide you with that information.

The last cool feature has to do with seller's that use AdWords to market their products. If you accept Google Checkout on your site, your Google Adwords will have a little shopping cart icon in it. That will let shoppers know you accept Google Checkout and will likely lead to higher click-through ratios.

First, there is no instant redirect after a customer makes payment. They get their payment confirmation page and they are stuck at Google after. It will be cool when they are able to be instantly redirected to a URL of the seller's choosing. This is a no-brainer feature that will surely be added soon.

Secondly, the payment is not processed in real time. When a customer clicks pay, it can take minute or hours for a payment to be charged and your Callback script to be activated. This has obvious problems especially with digital goods that promise immediate download. This, along with the point listed above are the main drawbacks for digital goods on Google. Tangible good sellers should not have much issue.

Thirdly, encrypted email addresses. Google provides a means for buyers to not provide their real email address to seller's during checkout. This means, if enabled, you get a fake Google Email address from the customer when they pay, like This creates an obvious problem when sending digital goods. So far, we have been getting bounces when sending to that email address from our Callback script, so we are not sure if that is a bug or not. This issue would be huge if not for the features listed above to send a note to the buyer via the API.

Finally, GC is only available to sellers based in the U.S.. They are obviously taking their rollout cautiously, but support for more countries will be required for it to be a real threat to anyone.
In conclusion, Google is out of the gate with a decent supplement to your existing payment solutions. I say supplement rather than alternative. I wouldn't go replacing your existing download fulfillment system with GC just yet, but there is not reason why you can offer both payment systems. We run the ability to checkout with Google or PayPal and let the customer decide. I'm sure they will address the above issues in upcoming releases that will make it a much better system.


p.s.- eBay's policy to ban Google Checkout as a payment option in eBay is definitely going to hurt their adoption rate. It is really crazy that eBay just blatantly blocks the payment method. I'm sure legally they can, it is just that the move is so obvious a very hard defensive measure taken to protect PayPal's foothold on eBay. If they are doing it now, maybe they should have done it with BillPoint in years past. That may have prevented the PayPal purchase ;) Of course they couldn't, since people were already using PP and the seller backlash would have made that impossible. Since GC didn't have any foothold, they could just ban it out of the gate. It is a shame methinks.

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