For the first time since its launch, traffic to the Google Checkout system has exceeded that of PayPals more established serviced.

According to reports from Hitwise’s Robin Goad, for the first time Google has taken a small lead in the battle to become the number one eCommerce software payment provider of choice. Although only launched in the UK in the last 18 months, Google checkout has already proved incredibly popular when compared against PayPal, partly for the strong brand behind it but also for the sometime poor history PayPal has had in the past. This doesn’t of course mean that more transactions are being processed by Google Checkout but that cannot be far away…

Unsurprisingly, the majority, some 59.1%, of traffic to PayPal comes from its parent company eBay, 12.4% from Google (irony is always amusing) and only 2.2% from shopping and classified ad sites. Conversely, Google gets the bulk of its own traffic from retailers, a whopping 45.3%.

Retention is also a lot higher for Google with 43.4% of users visiting another shopping site after checkout against just 26.7% for PayPal.

This basically means that there are more users abandoning their carts using Google Checkout than those using PayPal.

This in itself is surprising as both gateways offer a clear and simple interface for eCommerce software providers and a rapid checkout is essential. In addition, the implementation of Google Checkout for eCommerce software solutions is actually more complex than the simple PayPal “Buy Now” button.

So what does this mean for eCommerce software solutions, store owners and shoppers?

Well Google certainly has the brand and traffic to push their solution forward whereas PayPal is owned by the largest Auction site in the world so they both have solid sources of traffic. Developers may be snubbing the complex interface of the Google eCommerce offering band shoppers seem to prefer the simplicity of PayPal.

The best solution for eCommerce software providers therefore is to offer a choice to their users which is why Open Mind Commerce supports both gateways as well as over ten other payment options.

Choice is good, choice is important, shoppers shouldn’t be restricted to just one solution and should be given the freedom to choose.

As for the future it will certainly be interesting to watch the battle of the giants shape up…