Search, find, buy. No hold-ups at the web checkout

As Google rolls out an online-payment rival to PayPal, will our security worries vanish?
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The Independent Online

Many of us spend hours of our time browsing online for the latest iPod accessory, designer sunglasses or mobile phone, but the way we shop for those "must-have" purchases could be about to change.

At the end of June, Google, the internet's most popular search engine, launched Google Checkout - a new tool that should make online retail therapy both faster and easier.

Recognisable by a little green shopping-trolley icon, Checkout is the latest addition to the stable of money-making schemes operated by Google. Initially it will be available only on US shopping sites, but the company says it is working on turning this into a global system. Analysts expect it to be expanded to the UK, and beyond, within a matter of months.

Checkout is a rival to the web-payment service PayPal, which in eight years has built up 114 million accounts online. But despite promising pain-free shopping, the new kid on the block faces a long game of catch-up.

Here's how it works: once registered on Google Check- out, shoppers can buy any item where they see the shopping-trolley icon. Their personal and credit-card details are held on a database, so they don't have to resubmit them every time they make a purchase.

When you search for a particular product on Google, you will be able to see at a glance which of the sites are signed up to the Checkout scheme. You can then choose, if you wish, to browse only on those sites.

Consumers can benefit from being able to keep track of orders and deliveries of all the items they have bought online - all on one site.

"By integrating the checkout process with search and advertising, we're helping our users complete the cycle of searching, finding and buying," says Salar Kamangar, spokesman for product management at Google. "In the offline world, shoppers don't tolerate long lines and tedious data entry just to buy something. They shouldn't have to in the online world either."

While Checkout is an obvious add-on to the Google brand, PayPal is also growing into a full-blown financial services provider. It recently launched its own credit card, and linked its payment system to web-enabled mobile phones.

According to research in the US by financial services analyst JupiterResearch, nearly three-quarters of people who have been online in the past 12 months have bought something. Further findings show that those who have not made purchases have been deterred by concerns about their credit-card details falling into the wrong hands.

This fear of fraud is the reason why both Checkout and PayPal stress the security benefits of buying online using their systems - as opposed to entering your details on several sites across the web. Both services act as intermediaries and pledge not to reveal the consumer's full credit-card number to retailers.

PayPal's customers seem convinced: total transactions last year amounted to $27.5bn (£14.8bn), and were 45 per cent up on the previous year.

That said, the internet shopping market is still in its infancy: millions of people around the world have never purchased anything online - leaving plenty of scope for new entrants.

PayPal is certainly taking the threat of Checkout seriously. Its parent company, the online auction giant eBay, recently announced it would not allow Checkout to be used for eBay transactions.

This may be a blow to the Google service but it has not hampered its launch: the green shopping trolley is already running alongside popular US retail sites such as Starbucks, Levi's, Dockers and Timberland.

Much of the marketing for Checkout is being targeted at shopkeepers rather than shoppers. And the huge number of online traders who pay to advertise using Google's AdWords - the small promotions you see next to search results - are being offered incentives to sign up.

The Checkout system is open to all merchants even if they don't advertise in this way. But it has specified a long list of businesses for which it will not provide the service - including sellers of pornography, weapons and alcohol.

Those traders that are acceptable will, says the company, be offered protection against what are known as "chargebacks". This is where a consumer complains about a product or service and demands a refund from the credit card provider or payment system. It is a problem that has long plagued sellers on eBay using PayPal.

The difficulty is that when it comes to arguments over whether or not a product has arrived at the delivery address, and whether or not it is in good condition, the only evidence is the purchaser's word. Providers of payment systems want to keep both their buyers and vendors happy, but can be caught in the middle of disputes that are impossible to resolve.

Google Checkout claims to offer protection against unreasonable chargebacks - although it will be interesting to see how this works in practice.

Some consumers are also concerned about privacy and believe online brands such as Google are amassing too much information on their users.

The company, however, insists that it is sensitive to the issue of privacy, and says that it "will not sell or rent your personal information to companies or individuals outside Google". It will share information only to detect or prevent fraud, for example.

On top of this, buyers using Checkout are being offered extra protection in the form of a special email account to communicate with sellers - allowing them to keep their own email address secret.

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