PayPal went offline for over an hour last night making the second time in a month and the third time in the past 2 months that the service was unavailable. PayPal services have become increasingly unstable over the past year with numerous technical issues and down time that has impacts hundreds-of-thousands, if not millions, of users. My business was impacted last night during one of the busiest days of the past 2 years as the long-awaited Store Locator Plus 4 release was launched yesterday morning.
Once again I set out to find a suitable replacement. After some research into Amazon Payments, which has the same fee schedule as PayPal yet also has a “reserve” clause that holds your funds for 7-to-14 days, I opted not to use them. Same with Elavon and their ridiculous 3.5% + $0.40 per transaction fee, a monthly processing fee, batch processing fees and another myriad of add-on fees and costs that I had completely forgotten about after leaving the hard goods retail world a decade ago. Same for almost all “merchant services” (talk about a misnomer) credit card processors out there, charging more fees for less service. That left only two choices on my short list: PayPal and Google Checkout which is soon to be known as Google Wallet for Digital Goods.
As you can probably surmise by the name of the service, Google Wallet for Digital Goods will ONLY be useful for merchants that sell and ship digital goods. If you are shipping physical goods you can stop reading now, suck it up and go with PayPal. For those selling digital goods online or via mobile platforms you may want to keep reading. Maybe. As I learned along the way, the re-branding of Google Checkout to Google Wallet remains half-ass. Clearly Google has not assigned their “A-Team” to this project and it appears to be the red-headed stepchild of the Google Business offerings. As such I decided, like those with physical goods online stores, to just “suck it up” and stick with PayPal and all the warts that come with it. Yes, PayPal rates are higher than Google’s rates. Yes, PayPal SUCKS at helping merchants fight fraudulent chargebacks and actually turns a profit processing those chargebacks. But PayPal clearly thinks of merchant services as their primary business and not a “give these college kids something to work on”-back-room project like Google does. Pretty harsh review about Google Wallet for Business, I agree, but I also feel it is warranted.
I’ve checked out Google merchant services many times in the past. Despite some cleaned up modern graphics to help sell the service on the front-end, the back-end is a virtually unchanged hack job of an interface. Not only is the interface very pedestrian, it is rife with links to outdated help documents, is completely lacking the tools any serious online business needs to research and report on their sales, and is over-simplified to the point of being utterly useless for any real accounting such as import and processing transactions in QuickBooks. It is no wonder the Google Checkout service failed to ever gain ground against PayPal or the relatively-new-to-market Amazon Payments services.
The Fee Schedule
As with any merchant service one of the first things I look at is processing fees. Many credit card processors, places like Elavon and Authorize.net, eat you alive in processing fees. 10-cents here, a quarter-there. Before you know it you’ve shelled out $900 for $10,000 worth of sales. It is death by a million paper cuts. It was true 15 years ago and is true today, traditional credit card processing companies suck at dealing with new-economy merchants. On the other hand, places like PayPal, Amazon Payments, and Google Wallet for Digital Goods are all tooled specifically to help new economy merchants and have fee structures that are friendly to small businesses. As such, the first stop at Google Wallet is the fee schedule.
At Google Wallet you will find a very simple web page that states the fees are the LOWER of 5% of the sale OR 1.9% + $0.30. For anything that is selling at $10 or more the rate is 1.9% + $0.30 regardless of volume. Both PayPal and Amazon Payments require merchants to sell $100,000 PER MONTH before you qualify for that rate. If you sell $100k PER YEAR this lowers the fees you pay to the merchant processor by $600 when compared to PayPal.
However, when you sign up for the Google Wallet for Digital Goods service you are required to agree to the Terms of Service agreement. Within that document they have a myriad of links to various addendum pages including the Rate Schedule (list of fees). That link goes to an old Google Checkout transaction processing fees page that states the fees are IDENTICAL to the Amazon Payments/PayPal structure with one critical exception; Google charges 1% more per transaction if the buyer and seller are in different countries. So much for competitive rates.
When I discovered the discrepancy in published fees I decided I better get an answer to which fee schedule is the REAL schedule. If it is the original 1.9% deal then making a switch may be worth the effort. If, on the other hand, it is the tiered schedule that starts at 2.9% AND has a 1% “different country” penalty the switch would be a bad decision as I would lose money in fees AND a week of productivity would be lost during the transition. Thus I wrote Google an email via the customer support link at Google Wallet.
Kudos to Google Customer Service, they did respond quickly and gave me an example of a $9.67 transaction and a table that was cut from the web page I already read that states the fee as 1.9% plus $0.30. However they completely ignored the fact that the Terms of Service were wrong. Nor do I think that if this guy pulled up the WRONG information that Google would stand behind the rate schedule some customer support dude sent me via email. I can already see Google’s response when my first 3.9% processing fee for an order from the UK comes in… “Sorry Mr. Cleveland, the rate IS 3.9%, the customer service dude gave you bad information. You did read and agree to the Terms of Service, didn’t you?”. Customer Service also completely skirted the “buyer and seller in a different country” portion of my question and whether or not the 1% add-on fee applies. Though he did avoid answering the question in a very subtle ways saying, just before his $9.67 example “for transactions in the US”. If my read-between-the-lines skill are what I think they are then his answer was “yeah man, we’re gonna nail you for an extra 1% for selling anything to those dang non-Americans” which is EXACTLY what I don’t want as I try to expand my sales into an international customer base.
A Collection of Fail
I’m not sure why Google even has the Google Wallet for Business / Google Wallet for Digital Goods / Google Checkout That Is Almost Dead service online in its current state. How do they expect anyone to have any confidence that their transactions will be processed properly when Google, king of the World of Internet Searches, cannot even build a half-functional website. It doesn’t bode well for the service if the production manager on this site doesn’t take the time to hire one of their bazillion interns to try to surf the site and make sure it works. Fixing basic things like broken links or non-conflicting information would be nice.
Final decision? Not really. These kind of services change frequently and if Google ever decides to stop putting merchant services in the back room and “letting the kids play with it” I think they can be competitor. Especially as it is tied to their prolific mobile platforms payment engine that handles all of those android app sales. However someone needs to be put in charge for the non-app-store side of that business and try to actually compete with PayPal. Until they do so Google Checkout will continue to be a second-rate service that does not instil enough confidence in business owners such as my self to start putting all their online sales into the “Google Wallet Basket”.
Maybe next time around I’ll choose Google. For now I’ve decided to keep dating the wart-nosed older sister with more experience and stability than the younger less-refined and very schizophrenic cheaper date. That old girl may trip over her walker and make us late to our next dinner date, but at least I know she’ll be there. Warts and all. As for that younger sister, maybe she’ll grow up some day.