Google Checkout Raises Fees, Copies PayPal's Tiered Fee Structure

[mandy]

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

Beginning on May 5, 2009, transaction processing rates will be determined by your sales volume during April 2009. Each month thereafter, we'll continue to use the prior month's sales volume to determine your transaction processing rate. Learn more      
      [table]            [tr]              [td]Monthly Sales Through Google Checkout[/td]              [td]Fees Per Transaction[/td]            [/tr]            [tr]              [td]Less than $3,000[/td]              [td]2.9% + $0.30[/td]            [/tr]            [tr]              [td]$3,000 - $9,999.99[/td]              [td]2.5% + $0.30[/td]            [/tr]            [tr]              [td]$10,000 - $99,999.99[/td]              [td]2.2% + $0.30[/td]            [/tr]            [tr]              [td]$100,000 or more[/td]              [td]1.9% + $0.30[/td]            [/tr]          [/table] An additional 1% fee will be assessed on transactions where the merchant's country is different from the buyer's billing country. With 10 days notice, we may also charge higher transaction processing fees to merchants that incur excessive chargebacks or otherwise pose financial risk to Checkout.
         

[amy]

Copies PayPal's Tiered Fee Structure

GC's new rates are the same as PP but many sellers (like myself) will end up paying higher rates to use GC than PP  because GC requires a different account for every website/selling venue while PP allows you to use one account for all sites your business operates on.  I pay PP 2.2% but I'll be paying GC 2.5%-2.9% depending on the website since I'm forced to use a different account for every site.

[xwpopper]

[quote author=amy link=topic=18950.msg74141#msg74141 date=1236819256]

Copies PayPal's Tiered Fee Structure

GC's new rates are the same as PP but many sellers (like myself) will end up paying higher rates to use GC than PP  because GC requires a different account for every website/selling venue while PP allows you to use one account for all sites your business operates on.  I pay PP 2.2% but I'll be paying GC 2.5%-2.9% depending on the website since I'm forced to use a different account for every site.
[/quote]

Wow, I hadn't thought of that, but I suppose Google did.
How can a company with the revenues of Google justify competing with Paypal offering the same rates (higher with Amy's scenario) when:

A: Paypal offers instant access to payments, while Google usually means you have to wait 2-4 days.
B: Paypal is offered nearly everywhere, while less than 25% of Paypal merchants also accept Google.
C: Paypal is on eBay, Google is not.

So, what is the incentive for a merchant to accept Google along with Paypal? Unless they make Google Checkout a service similar to Verisign/Payflow, or Authorize.net, with instant checkout on a website as with a normal gateway, it won't compete at all anymore.

Those three points will help send Checkout to the same graveyard as many other Google Apps in the next couple years.

[jezebel]

GC's new rates are the same as PP but many sellers (like myself) will end up paying higher rates to use GC than PP  because GC requires a different account for every website/selling venue while PP allows you to use one account for all sites your business operates on.

an example business selling on 3 sites: site 1 $2500 monthly sales, site 2 $2500, site 3 $5000

PayPal: $220 monthly +$0.30*(x transactions)
Google Checkout: $270 monthly +$0.30*(x transactions)

Google Checkout would cost the example business $600 more per year than PayPal