Google Hikes Checkout Fees

Tiered rate structure mirrors PayPal's.

by staff writer
- Mar 12, 2009

The honeymoon will soon be over for online sellers who've enjoyed Google Checkout's cheap pricing. Beginning May 5, a new tiered rate structure takes effect that's practically a carbon copy of PayPal's—give or take a penny or two.

What's more, the new structure eliminates transaction fee rebates for AdWords users. Currently, sellers get $10 worth of transaction processing free for every $1 spent on AdWords.

Google Checkout was launched in 2006 to take on PayPal's online payments service, and its low transaction fees quickly won over online merchants—including many eBay sellers. Shortly after, eBay banned the service, citing security concerns.

Even as PayPal raised its fees, Google Checkout remained competitive, charging a flat 2 percent, plus 20 cents per transaction, regardless of sales volume. That's all changing. Following is a comparison of rates charged by Google and PayPal, based on monthly sales totals.

Google Checkout PayPal Fee Per Transaction
Less than $3,000 Less than $3,000 2.9% + 30 cents
$3,000-$9,999.99 $3,000.01-10,000 2.5% + 30 cents
$10,000-$99,999.99 $10,000.01-$100,000 2.2% + 30 cents
$100,000 or More More than $100,000 1.9% + $0.30

Like PayPal, Google will charge an additional 1 percent for cross-border transactions.

Additionally, when chargebacks occur, sellers will be charged the full amount of the chargeback, plus an additional $10 fee.

Forum posters criticized Google for raising prices during an economic recession. However, Google itself is in the midst of a retrenchment, as it struggles to remain profitable in the downturn. Since January, the company has pulled back on several side projects including Google Video, Google Catalog Search and Google Print Ads, among others.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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