Google Checkout Fees Now Identical to PayPal

The free lunch is gone!

[joestern]

Google Checkout will increase their fees to the EXACT same structure as PayPal, beginning May 5, 2009:

[checkout.google.com...]

for reference, here are PayPal's fees:

[paypal.com...]

Interestingly, since PayPal offers an eCheck option, limited to $5 per transaction, max, customers spending over about $250 by eCheck make PayPal the cheaper option for the vendor.

And the Google-waived fees for related AdWords spends are now totally gone.

[louponne]

Am I going bonkers or has the policy for non-profits also changed? Just a couple of weeks ago, I read the Google Checkout policy for those non-profits who have been accepted for the "Google Grants" program - the Checkout policy said that there would be no transaction fees for such non-profits and I don't remember at all there being a limit to that. Now I see that the free transactions policy is ending in 2010. That's pretty nasty to change that policy and set a cap to it all of a sudden. I had prepared to apply for the Google Grants setup for two non-profits so as to benefit from the free transactions - I was going to use Google Checkout exclusively for those - and am glad I didn't go through with that!

[amznVibe]

No one likes higher fees but if they cloned ebay, well then I'd happily pay.

[sun818]

Google Checkout was never positioned correctly to compete with Paypal. Google Checkout's biggest mistake was to "fund" all their payments with credit card. This means even with bank processing rates, they will always earn a smaller profit per transaction than Paypal. I'm sure Google Checkout will be around, but will not be a competitive threat to Paypal.

[vincevincevince]

I wonder if PayPal had something to do with this? It would certainly be in their financial interest to have Google Checkout increase their fees.

[sun818]

My guess is that Google Checkout just ran out of internal funding. They were trying to gain market share with $10 off $50 offers, free processing, etc. You can only lose money for so long. When Paypal first started, they gave every affiliate a $5 signup bonus [paypal.com]. You have other issues such as being late to the market and difficulty integrating with shopping carts in the beginning.

[MrHard]

One of the manufacturers we work with adopted Google Checkout when they first rolled out witht he free processing offer and made everyone pay using Google Checkout so save on all the credit card fees.

They must have saved a fortune LOL.

[avalon37]

Bumping my most pressing questions since no one has responded to them. Perhaps I'll start a thread in the Awords section.

Is anyone worried that dropping Google Checkout will hurt CTR because you will no longer have the Google Checkout icon next to your ad? I fear dropping this icon will lower CTR and raise CPC prices. For me, it sounds like it makes sense to keep it for that reason and because very few customers use Google Checkout so our fees won't go up much.

Also I thought I was reading recently that people think that having Google Checkout is helping people with Froogle/Google Base. That is something we also do not want to potentially jeopardize.

[joestern]

I have thought about the badge loss, but I guess I'm not even sure it will happen. If I just remove the Google Checkout links from my site, what will they do? Will they warn me that I'm going to lose my badge?

[avalon37]

I have to imagine the icon on the ads will disappear; you either offer Google checkout or you don't :)

[joestern]

Well, but being in the program and actually putting orders through are two different things, no?

[nealrodriguez]

i don't think they are going to be much competition for paypal; as paypal has been among the leaders in online payments for a minute. one of the reasons i used google checkout for a while, was because of their absence of fees. google imho is trying to be too many things to too many people. a strategy that never worked on the outernet; nor will the strategy work on the internet.

[IanTurner]

My thoughts are this is the response to talk of monopoly suits against Google.

Leveraging the position of Google checkout with the low fees and Adwords kickback could have been construed as abusing a monopoly position to oust the competition (i.e. paypal) moving the fees inline with paypal pretty much throws such accusations out of play.

On the other hand as a merchant considering Google checkout, I won't now be proceeding with the integration as there really is little to be gained from it - the higher processing fee just makes it economically unviable for us. I'll stick with my current provider which is considerably cheaper than both Google or Paypal.