Now that Google Checkout is available, web sites and their developers have multiple options for quickly and easily accepting electronic payments over the Internet. While both provide a means for buyers to securely shop, and both have anti-fraud policies to protect both consumers and businesses, we feel most businesses will want to use PayPal primarily, but offer Google Checkout for those buyers who are not comfortable using PayPal.

Google Checkout is simply the guardian of credit or debit card information. When a buyer checks out with Google Checkout, they can optionally transmit their mailing address or email address to a merchant, as well as opting into a merchant's newsletter. From the merchant's perspective, adding Google Checkout is as simple as using the Google Checkout site to generate HTML code and pasting it into their site. In exchange for this, Google collects a small fee, which can be reimbursed through purchasing Google's AdWords services.

When a buyer checks out, their credit card is charged, they receive an email, and the merchant receives an email. A few days later, the merchant, through their checking or savings account, receives the money from the buyer. At the end of the month, the merchant's sales are tallied up and fees are assessed. The standard Google Checkout fee is two percent of sales plus twenty cents per transaction. Through purchasing AdWords, merchants can receive ten dollars of free sales for every dollar spent in AdWords. As an example, a merchant who spends $50 per month in AdWords can process up to $500 in sales that month for free.

PayPal is a much more full-featured financial services provider. They provide for a holding account that can be optionally tied to an interest-bearing money market or even a debit card. PayPal also holds an advantage in that it is available in over fifty five countries as of this writing, while Google Checkout is only available in the United States. From the buyer's perspective, PayPal may be more convenient as it allows for purchases funded by a credit or debit card, as well as a checking or savings account.

While more and more ads on Google's ad network are carrying the Google Checkout badge, PayPal has 100 million users world-wide. Although Google Checkout is just starting off, PayPal has a massive lead in both time and users. Additionally, PayPal has established relationships with thousands of merchants, while Google is just starting to build their network. Another point in PayPal's favor is that the service that many believe made it into the success it is today, eBay, has disallowed Google Checkout as a means of paying for auctions, claiming it to be an unauthorized payment service that lacks a proven track record.

For a point by point comparison, well first consider the merchants. While PayPal has thousands, as well as the eBay marketplace, Google has hundreds, including buy.com and eCost.com. PayPal accepts credit and debit cards as well as bank accounts for making payments, while Google Checkout only accepts credit and debit cards. PayPal allows you to rate merchants on EBay only, while Google allows buyers to rate any merchants. PayPal is available in fifty five countries in six currencies, whereas Google Checkout is only available in the United States in US Dollars. PayPal will not allow a buyer to hide their email address, while Google Checkout will allow the buy to choose whether or not to share it. PayPal was literally built on user-to-user payments, while Google Checkout only allows payments to be made to established merchants. PayPal charges merchants 1.9 to 2.9 percent of sales, plus thirty cents per transaction, while Google Checkout charges two percent of sales plus twenty cents per transaction.