Google Checkout has reached 6% penetration in the online payment market since its launch eight months ago, but will need to resolve customer satisfaction issues before posing a serious threat to PayPal, according to a J.P. Morgan survey.
Morgan’s poll of 1,100 online shoppers, published late last week, found that 6% of its respondents had used Checkout, compared to 42% who used PayPal. The Morgan report termed that “a good start” for Checkout, saying that “Google’s aggressive promotions and discounting spurred the respectable launch.”
But the survey also noted that while 65% of credit-card users and 44% of PayPal users reported “good” or “very good” service making their online purchases, only 19% of Checkout users said the same, and 81% indicated a “fair to poor” experience.
“We believe Google may need to shore up its payment operations before building lasting user loyalty,” the report’s authors said.
They also recommended that Google continue aggressively promoting Checkout to increase its visibility.
Google is now offering new Checkout sign-ups a $10 credit they can spend with participating Google Checkout online merchants. Users must sign up before Feb. 15 2007, and use the credit before the end of March 2007. Last week the company moved that promotion to a prime spot on its home search page, a tactic that usually causes a traffic increase.
On the positive side for Google, the Morgan report also found that Checkout users are more affluent and younger than either PayPal or credit card users.
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