While Google’s payment system, Google Checkout, is not a giant in the online payments space, it is certainly not a failure, especially when compared to some of Google’s other product extensions. Launched in 2006, Google Checkout allows users to pay for an item using a preset log-in, similar to PayPal or Amazon Payments. The company claims that “hundreds of thousands” of merchants currently use Google Checkout. This seems modest compared to PayPal, which is growing by over 40 percent year over year, with total payment volume equaling $13.1 billion in Q2. While Google doesn’t reveal its transaction figures, it’s safe to assume that Checkout isn’t seeing nearly as much money flowing through its payment system as PayPal or even Amazon. But the landscape could look much differently if Google successfully makes three big plays.

First, Google starts pushing Checkout with the launch of Google Games later this year. As we reported earlier in July, Google invested somewhere between $100 million and $200 million in social gaming giant Zynga, with part of the strategic deal including Zynga’s games in Google’s Games portal. And Google just bought Slide in an effort to boost its standing in the social games world. These moves give Checkout a platform to grow. According to an Inside Network report, the U.S. market for virtual goods will reach $1.6 billion in 2010 alone. Social gaming contributes $835 million of that number. → Read More