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By | John Oates 12th March 2009 13:54

Google jacks up fees for Checkout service

Rip-off Britain is back

Google has pissed off online merchants who use its Checkout service by upping the fees it charges for the online payment service.

Rival service PayPal has been heavily criticised for upping fees and for aggressively "encouraging" its use on eBay - Australian eBay sellers could only take payment via PayPal until the company reversed the move in the face of user fury, and regulatory sabre rattling.

Hence the disappointment expressed by posters in merchant forums: "The whole reason to switch to Google Checkout was that they had lower processing fees and now they're basically the same as Paypal!"

Merchants in the UK currently pay 1.5 per cent of the value of the transaction and 15 pence. From 5 May this is replaced by a tiered structure starting at 3.4 per cent and 20 pence per transaction if monthly sales are worth less than £1,500.

For merchants turning over between £1,500 and £5,999.99 Google wants 2.9 per cent of each transaction and 20 pence.

Between £6,000 and £14,999.99 you will pay 2.4 per cent and the same 20 pence per transaction.

The next level, £15,000 and £54,999.99, is charged at 1.9 per cent plus 20 pence and for those happy few turning over more than £55,000 Google will gouge 1.4 per cent and 20 pence per transaction.

US merchants also face new fees in May but there are only four bands and fees range from 2.9 to 1.9 per cent of transaction value along with a 30 cent charge. US tiers are for less than $3,000 a month in sales, $3,000 to $9,999.99, $10,000 to $99,999.99 and over $100,000.

Google Checkout users are also losing their rebate gained if they also spend money on Google AdWords. Currently online shops can use Google Checkout for free for transactions totalling less than ten times their monthly AdWord spending. This ends 4 May.

Cross-border transaction get an extra one per cent added onto the total.

Checkpoint users in Google's forum were furious at the changes which they believe are now no better than PayPal's. Several claim to have already dumped the service. There is criticism of making the change during a serious recession, of the cross border charges and of losing the link with AdWords - which was the one compelling reason to use the service.

Google UK was unable to comment on this story.

The UK prices are detailed here and US fees are here, and reaction from angry users is here. ®

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