Google Checkout Ups Its Fees

In early May, merchants will start being charged larger fees for using Google Checkout. Google is also discontinuing AdWords free transaction processing.

"When we launched Google Checkout in 2006, we set out to create a fast, secure online shopping experience for our users," says Google Checkout Product Marketing Manager Anita Barci. "Now in our third year of helping merchants increase sales and attract user interest, we’re announcing the decision to move from our previous standard fee schedule to a new tiered pricing model where rates decrease as merchants process more transactions through Checkout."

Here is what the fees look like in the US:

Here’s what the fees look like for the UK:

To soften the blow, Google tries to encourage a higher volume of conversions by reminding users that a Google Checkout Badget in their ads can help. They say doing this has proven to convert 40% more than shoppers who have not used Checkout in the past. Following is the email that users are getting:

Hello,

We’re writing to let you know that on May 5, 2009, Google
Checkout’s transaction processing fees will be changing. We’ll be
transitioning from our 2.0% + $0.20 per transaction rate to a new
tiered fee structure, where the rates will vary depending on the
dollar amount of your monthly sales processed through Checkout.
The rate you’ll be charged beginning on May 5, 2009 will be based
on your sales processed through Checkout during the month of April
2009. Each month thereafter, we’ll continue to use the prior
month’s sales volume to determine your transaction processing
rate. For more details about the new rates, please visit
http://checkout.google.com/seller/fees.html

We’ll also be discontinuing the AdWords free transaction
processing promotion on May 5, 2009. Any AdWords transaction
processing credits accrued during April 2009 will be applied
towards transactions that occur on May 1-4, 2009.

Fees are the same for all payment types (Visa, MasterCard,
American Express, and Discover) and there are still no monthly,
setup, or gateway fees. For cross-border transactions, there will
be an additional 1% fee assessed per transaction. To learn more
about Google Checkout fees, please visit
http://checkout.google.com/seller/fees.html

Google is committed to the continued growth and development of
Checkout and to helping merchants increase sales by driving more
leads and higher conversions. Advertisers who use Checkout have
the opportunity to display the Checkout badge on their ads, which
has proven to be an effective way to differentiate ads and attract
user interest. Checkout users click on ads 10% more when the ad
displays the Checkout badge and convert 40% more than shoppers who
have not used Checkout in the past.

For more information about this change and how it affects the
product, please read our post on The Official Google Checkout
Blog: http://googlecheckout.blogspot.com/2009/03/google-checkout-fees-in-2009.html

If you have any questions, please visit our Help Center at
http://checkout.google.com/support/sell/bin/answer.py?answer=134473
Thank you for using Google Checkout.

Sincerely,
The Google Checkout Team

There are 4 Comments. Add Yours.

Joe
March 12, 2009 at 11:51 am

I’m surprised that google Checkout chose now to raise its rates. It looks like Checkout has raised its fees to match paypal:
http://www.paypal.com/cgi-bin/webscr?cmd=_display-fees-outside

To my knowledge Paypal is still much larger than Checkout. If the goal of Checkout is to gain ground on Paypal, why raise your rates to match theirs? The lack of competition is troubling.
Anonymous
March 12, 2009 at 8:41 pm

I’ve known people for years that used google checkout for who knows what reason, maybe for the rates. Then whenever google arbitrarily suspends them for no reason, google automatically refunds every single buyer who ever paid them through its service, going back to the start of their account. Then google steals that from the seller’s bank account. I don’t know why people use it fully knowing google does that but the do and then they BAWWWWW about it. 2checkout does the same thing. PayPal doesn’t though. PayPal just freezes the funds for a year or two.
Ron P
March 14, 2009 at 9:49 am

Join the Facebook group Merchant’s Against Googel Checkout Fee Hikes. Here’s the link:

http://www.facebook.com/group.php?gid=57485523675&ref=nf

We as merchants don’t need this now.
Hotels
May 7, 2009 at 2:33 am

You knew this day was going to come, and it’s a bit of a shame, as I know quite a few businesses that stopped using that checkout service once Google added fees.

Nothing in life is free!