I’m a bit late on getting to this, but in case you missed it, Google has launched an online wallet or checkout service similar to those offered by Microsoft and Yahoo.
Speculated on at ZDnet over a month ago, the service is designed to tie in heavily with Google Adwords, which together with the financial incentives involved will probably lead to it quickly growing in popularity.

From the official press release:

Here’s how it works: shoppers can find stores that accept Google Checkout by looking for the Google Checkout icon on AdWords advertisements or whenever they come across the Google Checkout option on a merchant’s site. If shoppers want to use Google Checkout, they can create a Google Checkout login right from the merchant’s site with a single username and password by entering basic information, such as their contact details, payment preferences, and shipping information, once. Then, when checking out at any store that offers Google Checkout, they can simply select Google Checkout, quickly complete their transaction with their login information, and avoid the hassle of filling out multiple forms. In addition, shoppers can keep track of their purchase history, including orders and shipping details, in one place.

Shoppers can also enhance their security when making purchases through Google Checkout. The service conceals the buyer credit card number and provides reimbursement for unauthorized purchases. And to provide more control over email spam, Google Checkout lets shoppers choose whether or not to keep email addresses confidential or turnoff unwanted email from the stores where they shop.

Google Checkout enables purchases using existing payment methods, including Visa, MasterCard, American Express and Discover.

Said Salar Kamangar, vice president of product management at Google, “Consumers with a Google account can type their credit card and billing information into Google Checkout once and then pay for purchases thereafter with practically one click on any Web site that features the system.”

And on the merchant side of things:

Google Checkout helps merchants streamline the checkout process and also works with Google’s advertising program, AdWords, so merchants can attract more customers and increase sales. The Google Checkout icon on AdWords advertisements makes it easier for shoppers to find Google Checkout stores when they search. Once shoppers buy with Google Checkout, AdWords advertisers can also process all or a portion of their sales for free. For every $1 merchants spend on AdWords, they can process $10 in sales through Google Checkout at no charge.

The New York Times has a good article on what this all might mean. Here’s a couple of excerpts:

Google is charging merchants 20 cents plus 2 percent of the purchase price to process card transactions, less than most businesses pay for credit card processing. Banking industry executives say that credit card processors typically pay MasterCard and Visa a fee of 30 cents and 1.95 percent for every purchase, so Google will be subsidizing many transactions.

What is more, for every $1 a company spends on search advertising, Google will waive the fees on $10 worth of purchases. Factoring in the 2 percent fee, that represents a rebate of at least 20 percent of advertising spending.

Eric Schmidt, the chief executive, said the company was willing to lose money on transaction fees because it felt the package would increase advertising spending.

Advertisements on Google.com from companies that accept Google Checkout will display a small image of a shopping cart. Clicking on the ad will take customers to the advertiser’s Web site, as it does now. When customers decide to buy something, they will be offered the option to sign into Google Checkout and use the credit card and address information on file there. Customers that do not have accounts with Google will be encouraged to set them up.

Google may get several additional benefits from the checkout service. It will encourage more users to register and give it personal data, allowing Google to display advertising based on specific attributes of the viewer. More broadly, the data the company gets from transactions could help it improve the way it chooses which advertising to show to which users. Google says it does not currently plan to use transaction data in this way.

Over on the Google Blog, amongst other things, Google’s Benjamin Ling, Product Lead, and Louis Perrochon, Engineering Director say:

Because we see big benefits for shoppers as the service grows, our immediate priority is to help more online stores join Jockey, Starbucks Store, Levi’s, Dockers, Buy.com, Timberland, Zales, and others to offer Checkout on their sites. To keep website integration simple, we’ve built a range of integration alternatives such as cut and paste buy buttons, pre-integrated ecommerce partner offerings, and an API that supports more advanced integration.

Beyond flexible integration options, Google Checkout also works with Google’s search advertising program, AdWords, so online stores can more easily attract new customers, increase sales and process them for free. We’re especially excited about combining Google Checkout with AdWords because it gives our advertisers a more complete solution for attracting customers through Google and processing the sales that result.

It’s going to be interesting to see how this develops, what effect Google Checkout has on other card processing services like PayPal and 2CheckOut, and the way consumers make their online purchases. I suspect the impact will be big. Of course consumers like ease, and many (foolishly?) like and trust Google, but most of all, merchants love to cut costs, and Google have just jumped into the market with the cheapest option. Add to that the extra benefits for the massive pool of Adwords users, and it becomes hard to imagine the service not becoming pretty ubiquitous in short order.

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