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Google Checkout Transaction Processing Fee Changes

Posted on March 25, 2009 by Zach

No doubt retailers that offer Google Checkout as a payment option are now aware Google is changing their transaction processing fees to a new tiered structure and removing the Adwords processing credits. This is a pretty large change they plan on implementing, and one that will likely be adding much higher processing fees for Google Checkout Merchants.

Old Fee structure V. New Fee Structure

Under the old model if you processed $100,000 in one month through Google Checkout which represented 1,000 orders you would be charged $2400 in processing fees, which include the per transaction fee of $0.20.  Seems legit right? But let’s say you also spent $10,000 on Google Adwords the previous month, you would get that $100,000 processed for free because they will process 10 times whatever your Adwords spend is for free and everything else at the normal rates.  Nice kicker huh, for taking on Google checkout and also using multiple Google services?

Under the new model if you processed $100,000 in one month through Google Checkout which represented 1,000 orders (this pushes merchants into the lowest tier of processing fees at 1.9%) you would be charged $2200 is processing fees, which includes the per transaction fee of $0.30.  The fees are slightly lower than the previous model, that's great right?  Maybe not, let’s say you still spent that same $10,000 on Adwords the previous month, under the new model you now owe the full $2,200 in processing fees! They are removing the Adwords processing credits.  Wha wha wha!

Our wonderful checkout representative plans on calling me this week to review the changes and let us know what they plan on accomplishing with the fee changes, but still that's a pretty steep increase in fees. The fees are especially high when you take into consideration, that we made the upfront investment to take on Google checkout, pay for the development and fully integrate Google checkout. Granted, they have tossed on some awesome promotions since we implemented the feature and have successfully heavily engaged users.  It’s still a hard chunk of change to write a check for (or never see as the case may be). On top of the hard economic times, I hope that this does not affect too many merchants in an extremely negative fashion.  I could see merchants with large Adwords budgets who process a lot of dollars through Google Checkout possibly getting thrown under the bus on this one.

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