Google Checkout – The Free Ride is Over

Today Google announced they are ending the free ride for transaction processing with Google Checkout for AdWords advertisers.  Does this mean they are surrendering to PayPal, or do they need a few more bucks?

In case you aren’t familiar with Google Checkout, it is their answer to PayPal, plus a bit more.  Google Checkout lets users use their stored information on Google to make their purchase , thus reducing shopping cart abandonment  and increasing sales. The big advantage was for AdWords advertisers who offer Google Checkout as they can place the Google Checkout badge in their AdWords ads, which differentiates the listing. On top of that, the AdWords spend counts to offset the merchant service fee that would normally be charged by 10 to 1 – so if you spend $100 on AdWords, Google will waive up to $1,000 in merchant services fees for all purchases using Google Checkout during that month.  You can read my full write up here.

As of  May 5, 2009,  Google will discontinue the AdWords match against Google Checkout merchant services credit card processing fees.  Any AdWords transaction processing credits accrued during April 2009 will be applied towards transactions that occur on May 1-4, 2009. Google Checkout’s transaction processing fees then transition from 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 new fees are an exact match of PayPal’s fees.  So if your business is driven by Google ads it makes sense to offer Google Checkout.  If your business is driven by eBay and Yahoo ads then PayPal makes sense.  Of course, shopping around for merchant fees makes a ton of sense and you can really save money by comparison shopping and negotiating.  I continue to be surprised by the number of online stores who dont offer either one – in my book the more payment options you give the customer, the better.

PayPal Transaction Fees

Google Checkout Transaction Fees

4 Responses to “Google Checkout – The Free Ride is Over”

1. vinay on March 11th, 2009:

   I think Google is now not making the profits it used to. Every company is being hit be recession and Google is no different. It had to happen and hence Google has rolled out the google checkout.

2. Ciaran on March 11th, 2009:

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