JPMorgan as put together an overview of a study they recently undertook where they surveyed over 1,000 consumers to gauge their online spending behavior, adoption rates of Google Checkout, and the associated implications for PayPal.
Here are the key findings:
- Google Checkout Adoption hits 6% in first year. Our survey suggests that in less than a year, Google Checkout has penetrated 6% of consumers, according to our survey.
Although Google’s adoption rate is considerably lower than PayPal’s (42%), we believe the product had a good start. We believe Google’s aggressive promotions and discounting spurred the respectable launch.
- Google Checkout Users Skew Male, Affluent, and Young. Our survey suggests that Google Checkout penetration rates are 2x higher among men.
Further, a hefty 34% of Checkout users have incomes over $75K (compared to 25% for PayPal, and 20% for all online shoppers). Finally, Checkout users are substantially younger (57% under 35 years old) than either PayPal (36%) or credit card users (35%).
- But Google Checkout Needs to Work Out Some Kinks. Despite 65% of credit card users and 44% of PayPal users reporting ‘Good’ or ‘Very Good’ service experiences, only 19% of Google Checkout users said the same. As such, we believe Google may need to shore up its payment operations before building lasting user loyalty.
- PayPal Maintains Its Leadership Position. PayPal’s 42% penetration rate in 2006 was 7x that of Google checkout. Additionally, 43% of respondents indicated that they would continue to prefer PayPal over Google Checkout, compared to only 2% that reported the inverse. Finally, PayPal maintains superior brand awareness over Google Checkout. More than 56% of the respondents in our survey reported having no familiarity with Google Checkout. We think Google will need to continue aggressive promotion in 2007 to increase product visibility.
Read the entire report (PDF file) at:
Google Checkout vs. PayPal ; Google Launch Shows Promise, but PayPal Still Dominates