This is my message: Avoid paying for things using PayPal or Google Checkout.Â It’s always a good idea to pay for anything you buy online by credit card, so you get protection under the Consumer Credit Act if anything goes wrong.
I won’t pretend to like ebay (owners of PayPal) but I do have a soft spot for Google. Nevertheless, there are very good reasons why you should avoid using Google Checkout and even more to avoid using PayPal.
The main one is that they are middle-men, adding another layer of complexity to your transaction. For an example, look at dabs.com, now owned by BT (and with the poor customer service you’d expect of a BT company),Â or ebuyer.com, online computer & electronics retailers . They both accept payment via PayPal, Google Checkout and their own checkout.
When you pay directly by credit card (ie using the company’s own checkout) the company requests the money from whoever handles their credit card payments, who request it from your bank.
When you pay by PayPal, PayPal request the money from whoever handles their credit card payments, who request it from your bank and then pass it on to the retailer. This has 2 implications; it could lead to higher prices in the long term, and it’s riskier for you in the immediate term.
Pushing Up PricesÂ
You now have an extra link in the chain, meaning an extra middle-man out for profit. This inevitably means the more widespread PayPal usage becomes, the more prices will be hiked up to pay off the extra middle-man. On this part, the same is probably true of Google.
There’s another reason not to use PayPal though, and potentially much more important. Because it’s PayPal that actually receives the payment from your credit card, what you’re actually paying for is not the goods you order from dabs.com (or whoever else). What you’re paying for is for PayPal to send money to the retailer. This means that even if the retailer never sends you anything, they’ve completed the transaction just by giving them the money and so you will most likely not be able to dispute the transaction through your card issuer or bank (I don’t think this applies to Google Checkout purchases, but I’m not 100% sure). Instead you have to take the dispute up with PayPal – and that’s never a pleasant experience for anyone. Let’s just say they’re not famed for their customer service.
The strangest thing is that most of the sites that accept both PayPal and Google Checkout (like those mentioned above) also have their own checkout, where you pay by credit card and the payment goes straight to the seller.Â So why risk losing the protection?