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for reference, here are PayPal's fees:
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.
I'm pretty sure we'll drop them on 5/5 also. If we hear from customers that this is an issue, maybe we'll reconsider, but I doubt it.
Frankly, since GC and PayPal now use the same tiered pricing, financially, I should only take one so that I can try to get as many of these off-site payments into the same basket and get the best tier. So, of course, I'll go with the one with more sales currently. That's PayPal, hands-down.
I wonder if PayPal will be the big winner here. They're probably pretty happy with this news.
I can't imagine many of our customers using it at all after we stop pushing it. In fact, we may even remove it because my primary CC processor fee's are actually lower than the new Google fees.
The way they force you to have their "buy with Google Checkout" buttons under your own Add to Basket buttons is ridiculous. It is hard enough getting people to order without having two different buttons to purchase.
I have offered for some time as an alternative payment method (like PayPal) but have only had a very limited number of orders. Less than 0.1% have chosen it.
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.
Probably only 1% of merchants can see a potential decrease in prices here, and even so, it will be minimal.
But they make sure to use the term "rates decrease" in there, in a very misleading way.
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.
Mind you, I'd still have rejected them at the proposed rates, so maybe they have some logic there. :)
We probably take four or five times as many orders through PayPal than we do with Google, and the ones do process through Checkout are usually higher value customers that have been 'gently persuaded' to use it so we can take advantage of the cheaper processing.
So we've now got the option of either:
a) Leaving Google Checkout as a payment option and offering the customers a choice of payment methods.
b) Removing GC totally and trying to move into a more profitable tier with PayPal.
Got until May to decide that anyway.
Is there perhaps something else going on here? Are Google avoiding potential accusations of anti-competitive behaviour? Or maybe there's a deal with eBay that would involve seeing GC on eBay? Or maybe it is just Google trying to get some money back on a loss making service.
Namely: Yahoo! is getting out of the auction website business in the UK and has begun promoting ebay on their homepage (you've seen it if you've been shown the upcoming Yahoo! templates in advance).
Yahoo! is now an ebay affiliate, all the ebay links on the upcoming yahoo homepage are affiliate rover links complete with a new tool for their email users to track ebay.
Search and auction seem to be headed for friendship imo. Paypal is part of that. Perhaps Google has seen the new eBay yahoo! partnership and is aligning themselves because of it?
[edited by: JS_Harris at 7:56 am (utc) on Mar. 13, 2009]
I don't use GC but I do have a question... how are chargebacks? Maybe the higher cost is a premium to counter the costs associated with having a large amount of chargebacks?
Keep an eye on your individual orders. I don't suggest shipping orders that are not flagged by "Covered by Payment Guarantee". Most are, some may not be.
Watch out for "reserves". Obviously, this is a separate account that is held for future chargebacks. Try no to let this reserve get to high. A google rep informed me that an account has to be closed for 6 months to recover the funds. The reserve does not incur interest. To the best of my knowledge, refunds and chargebacks are initially deducted from unpayed payouts anyway.
As far as the fees, I saw this coming months ago when PayPal sent me an update of their terms. I believe I actually had to sign off on this one. I saw the bank Wells Fargo in their terms. Wells Fargo, I believe owns, First Data at least that's what my USBank banker blushingly told me when I informed him I signed up with First Data. He could be wrong.
I have no problem with Wells, First Data, Paymentech or their alliances with other companies like Google or PayPal but if you Google "First Data Paymentech Wells Fargo" or even "First Data Paymentech" you may see a pattern. I believe things are just normalizing now. I thought this would actually happen around 1/1/09.
We only had one with them, and they really couldn't have done a worse job on our behalf. They basically gave the money back even without demanding a return of the merchandise. It was a complete joke - they were clearly novices in this area.
Unfortunately, when middlemen have to deal with chargebacks, they just don't care. It's not in their financial interests to care either way, just to spend as little time as possible.
PayPal, at least, has established rules and knowledgeable personnel. Google was really nothing more than some auto-reply emails that didn't apply to our situation.
The more I think about the problems I've overlooked for the free processing, the more I'll be glad to be done.
For example, have you ever tried to reconcile their fees? They get assessed and then somehow credited back into the previous day's batch. Further, they don't take back the free processing on credits, so you actually make money on credits if the original charge came under your free umbrella.
I hadn't really thought about it, but the poster who said that outside of search, Google hasn't been that stellar, really had it right. This is a mess, and I'll be glad to be done with it, even in spite of the few hundred a month I'm currently saving on it.