Google Checkout Changing Processing Fee Structure

Google is changing the fee structure at Google Checkout from a uniform 2.0% + $0.20 per transaction rate to a new tiered rate service which will reflect the different goods and sales processed via Google Checkout (a Google Checkout Quality Score?).

Google Checkout sent this email out to vendors last night :

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.

What does this mean? It means that the more dollars you process, the lower your overall fee structure will be :

Also Note (from Google Checkout) :

• 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.

Furthermore, Google Checkout will also be discontinuing the AdWords free transaction processing. The new Adwords fee processing structure will be based on the Adwords spend of the advertiser, and the amount of Google Checkout sales :

The cost of doing business? Still with this fee structure Google Checkout is a more cost efficient solution for my company than our internal credit card processing provider, which charges higher fees for cards which use loyalty points services and other processing fees. Likewise, Google Checkout is a lot easier for me to manage than Paypal, and does not serve as an accounting headache for clients.

The processing fee changes will surely result in modified bottom lines for businesses which use Google Checkout, and further incentivize launching a Google AdWords campaign to offset basic fees.

As for non-profit associations, Google has also adjusted the processing structure in this sector as well :

Google Grants recipients based in the United States are eligible for free transaction processing for donations received through Checkout until January 1, 2010. All other IRS certified 501(c)(3) organizations will be charged a low 2% + $0.20 per transaction until May 5, 2009, after which they will transition to the tiered pricing structure outlined above. There are no monthly, setup, or gateway service fees. We reserve the right to impose reasonable limits at our discretion

What are your thoughts on the changes to the Google Checkout processing fees?