Checking Up on Checkout

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We haven't been hearing a lot out of Google Checkout since its June debut. What some figured would be a PayPal killer has ultimately been one of Google's (Nasdaq: GOOG) quieter rollouts and not much of a threat to PayPal parent eBay (Nasdaq: EBAY).

Is that going to change over the holidays?

I received a press release this week from TheFurniture.com, promoting the store's usage of Google Checkout. Sure enough, just head to the online furniture retailer's site and the Google button is featured far more prominently on the main page than the other pay options that are available, such as credit cards and PayPal. Drop an item into your cart and even the checkout screen features the option of proceeding directly to a Google Checkout transaction instead of the more conventional checkout route.

Why is the store so set on pushing Google's online financial payment service? According to its CEO, the company is earning an extra 3% on its Google Checkout transactions because Google is reimbursing vendors for its processing fees (mostly through an advertising credit on Google AdWords).

In big-ticket retail, one rarely turns down the chance to widen margins. Since implementing, and naturally promoting, Google Checkout on the site, TheFurniture is closing 8% to 12% of its sales through Google's nascent platform. PayPal used to seal the deal on 8% to 10% of the site's transactions, but that has now been whittled away to just 3% to 4% of total sales.

Naturally, TheFurniture is not the only retailer taking to the Big G solution. Over at iRobot (Nasdaq: IRBT), Google Checkout is also a preferred payment method. If you're looking for a robotic vacuum cleaner or floor scrubber, you can even go through the Google Checkout homepage and get $10 off your order.

There are several publicly traded retailers that you may recognize from Google's promotional offer page. From Aeropostale (NYSE: ARO) to Dick's Sporting Goods (NYSE: DKS) to Zale (NYSE: ZLC), odds are that Google's gateway may have something you need to purchase this holiday season.

Inspiring merchants to promote Google Checkout is brilliant, of course. Old fans of PayPal may recall how the company became a big hit by aiming for the consumers first. It would pay customers $5 to $10 for opening a new account, and then offered a similar amount for any referrals. It was the viral approach that killed eBay's own Billpoint venture and led to eBay ultimately swallowing PayPal whole.

So this explains why Google Checkout has been staying out of the limelight these days. It may look like it's playing dead, but it's actually arming itself with a rich collection of retailers that will help spread the word once holiday shopping picks up steam next month. It may be out of sight, out of mind -- but it's clearly out to mine some sites.

eBayis aMotley Fool Stock Advisorrecommendation, while iRobot is a pick in the more aggressiveRule Breakersstock-picking service.

Longtime Fool contributor Rick Munarriz is a huge fan of most things Google and a satisfied eBay user -- with the 169 positive feedback recs to show for it. He does not own shares in any of the companies mentioned in this story. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.The Fool has a disclosure policy.