Seller's Choice: Google Checkout or PayPal?
So now you know a little bit more about both PayPal and Google Checkout. If you're a web-based merchant, which service should you use?
For many merchants, the lower transaction fees charged by Google Checkout (2% versus PayPal's 2.9%) are quite attractive. On the other hand, PayPal's expanded payment options, wider array of services (including pre-paid mailing labels), and larger number of service plans are also appealing. In addition, PayPal has established name recognition in the field of payment services, and Google Checkout hasn't—although, one could argue, the Google name itself is all the name recognition you need.
Table 5 provides a quick comparison of each service for sellers.
Table 5. PayPal Versus Google Checkout: From a Seller's Perspective
To make your choice easier, here's what Google Checkout does that PayPal doesn't do:
- Lower transaction fees for smaller merchants
- Discount for AdWords advertisers
And here's what PayPal does that Google Checkout doesn't:
- Accepts payments via e-check and bank account withdrawal
- Accepts payments from other countries, in other currencies
- Automatically calculates sales tax and shipping/handling charges
- Prints packing receipts
- Prints mailing labels with pre-paid postage
- Can cut a check for funds due (in addition to bank account direct deposit)
That's a lot of additional services offered by PayPal. On the other hand, for most merchants, Google Checkout will cost you less. If you do $2,000 worth of business a month, Google Checkout will save you more than $18 per month—that's a full percentage point of profit that drops right to the bottom line. And when you're a small merchant trying to make ends meet, every dollar counts.
So which service should you go with? If you're a small merchant who needs basic credit card services and don't need PayPal's additional services, save some bucks and go with Google Checkout. But if you need those services that PayPal offers, or if you do more than $100,000 per month in sales, stick with PayPal.