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Google Checkout Raises Fees and Removes Credit for AdWords Spend
The Google Checkout team has announced some major changes to the fee structure for merchants using the Google Checkout payment processing system. The new pricing appears to match the pricing by competitor PayPal.
Andy Beal has a good overview of the changes which he calls, "worse, worser and even worser". Here is the new fee tier structure based on monthly sales:
- less than $3,000 – 2.9% + $0.30
- $3,000 – $9,999.99 – 2.5% + $0.30
- $10,000 – $99,999.99 – 2.2% + $0.30
- $100,000 or more – 1.9% + $0.30
To give you an idea, as of today, here’s what you pay: 2% + $0.20 per transaction. While Google makes out that customers may see a decrease, I doubt the percentage is that high for customers with over $100,000 a month in sales.
The other news is that the fee credit provided by purchasing AdWords is also going to be removed. When I signed up for Google Checkout last month, I was pleasantly surprised to see the fee credit. It’s certainly disappointing to see the credit removed – wonder how that will impact AdWords sales which in turn will affect AdSense publishers.
Also, if your customer is located in another country, you will need to tack on another 1% fee on the purchase amount.
Update: Rich has a good overview of the changes from a UK perspective.
Let’s be honest, this is the DUMBEST move by Google… Whoever made this decision should be fired.
We’re taking Google Checkout off our site, the fee credit was our only reason for allowing it to be an option (not to mention only about 10% of our sales actually use it) Like an earlier post mentioned, it doesn’t even seemlessly integrate, Google yanks them off your site to process the card.
This makes no sense. Checkout hasn’t been much of a success for Google. So they raise prices? Yeah that’s sure to make it more popular with merchants.
Now the fees are identical to Paypal and there is no “advertiser bonus”, I do wonder why we should bother using Google Checkout given it’s low market penetration, higher cross-border fees and more complex integration requirements (see my blog post about Google Checkout and Paypal).
good post – I added your link to the main post.
my thoughts are that there’s no reason not to offer the service – if a customer won’t use paypal, offering the google checkout choice might get you the business.
True, but if you get a split of 50% using Paypal and 50% using Checkout: you then won’t have the volume to take advantage of the higher volume transaction fee discounts (so you may end up paying more by offering two services). The lower Google Checkout fees did at least counteract this so it was less of a concern (and nearly worth dropping Paypal for: despite the added advantages which Paypal had).
I look at it Like this. Google Checkout is not Paypal. My payments are about a 50/50 split between the two. It seems like every month I have to fight paypal over payments, With Google I have never had a Problem. To me Google is the best I have now.
Google raises rates to create short term cash. I will go back to PayPal to get a better volume discount as PP offers far more features (assuming they work once in a while). I suspect Google is having cash problems and this is not the way to solve them.
Well, I used GoogleCheckout only because we had a credit for Ads. We have a deal with Protx and bank merchant and their prices are so much lower. Why bother with PayPal or Google if you can deal with bank and pay fraction of the price. At the end of the day client pays with credit/debit card.
Besides customer care for Google is no existance. You may try to send an email, but they would reply with answers copied from their FAQs.
So Google is a ‘no no’ for me once they stop allowing to use credit for Ads.