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Google Checkout still not checking out around the world

  • By Timothy Roberts
  • Thursday, January 13, 2011

Google Checkout is an interesting point in the map of Mobile Money. As with most Google products, it seems to be the answer to everything, and with the Mountain View based company behind it, why isn’t it everywhere and dwarfing other options just as Google does in search? Google Checkout was set up to take small payments for web services and other items, a central system for users and a single point of contact for developers and user.

And then Google Checkout was thrown into the front line of mobile payment… the Android smartphone application store. From a technical point of view Google needed a way for people to pay for applications on their ‘free’ mobile OS, and they had their own payment system in place.

It just wasn’t ready for the big time.

Checkout’s major issue right now is that the customer base is either not there or can’t use it. Handsets are bought, but only in a handful of countries can users actually pay for the applications. In most regions, the options are for the developer to offer the application for free and hope for residual income, or not offer their apps at all. In either case the levels of casual software piracy are significantly higher than on smartphones where payment options are available.

The problems with Google Checkout are already having an impact on the Android smartphone. Rovio, developers behind the huge Angry Birds franchise, have already given up on charging for the app on Android because they can’t offer the same experience to their fans around the world. They’ve had to go for an ad supported model in the first instance and are trying to sort out carrier billing themselves – a herculean task attempted before by many, and one reason why Nokia’s Ovi Store proves so attractive.

While the issue of payment is not unique to the Android platform, two other major players have approached it from a different angle. Apple captures credit card details from every user when the phone is activated and ties this into the iTunes Store, while Nokia (still the biggest player in the smartphone market with Symbian OS) has carrier billing relationships in over 90 countries so far, and a guaranteed 70% cut of the gross selling price to the developer.

So what will Google do now? On previous form they’ll probably end up buying one of the established micropayment services that already have the global presence that would match with Android adoption. While so many companies focus on getting the payment system established and then finding a use for it, Google have got the opposite problem. They’ve got a use case, and a mobile payment system that doesn’t work.

Which means there’s one more opportunity for someone out there in 2011.