The Devils in the Details
Unfortunately, Google Checkout is structured for high volume merchants and suffers much the same problem Paypal donations do these days. Namely each transaction incurs a minimum service fee of $0.30 plus a percentage based on your monthly volume. Dare I say most bloggers would fall under the $3,000 monthly threshold meaning each transaction takes a 2.9% fee on top of the $0.30 service charge. For instance a tip of $1.00 would see $0.329 taken by Google, I assume would round up to 33 cents. On the other hand a $10 tip would cost you $0.59. In all honesty, this just isn't a very sustainable or realistic model for low volume tip transactions.
Additionally, the registration process with Google Checkout for merchants isn't entirely friendly to anyone not Blogging professionally. You're required to register your 'business' either with a Federal Tax ID, a Credit Card + Social Security number or just a Credit Card. Reading the registration documentation I understand why this is necessary for true businesses, but the average person just looking to take in a few minor denomination tips the process feels like extraordinary overkill on the front end.
Alternatives
Paypal costs these days are in line with Google Checkout, although personal transfers from account balance are free. Unfortunately, the method of avoiding said fees is not a straight forward easy process for visitors and it requires tippers to have a paypal account. The Chip In widget is a nice looking alternative, however it is built upon a Paypal and transactions are subject to fee terms. I'm unsure if small donations are again subject to exorbitant fees or not, though I suspect many are. If any readers know a good alternative small dollar tip service, I'd love to hear about it.
Conclusion
The Google Checkout tip gadget is a nice new simple feature in the Blogger toolbox. If you already have a merchant account, it should be a breeze to setup. Those with a Paypal account really have little reason to change to Google Checkout since there is no cost advantage. All you gain is simplicity of setting up the gadget, but honestly adding a Paypal donate button is hardly challenging. For everyone else though, it's worth considering.
3 comments :
Thanks for the heads up! I find it kind of tacky to ask for donations while being hosted on a free server, but this information just confirms my feelings.
@EchoDust, I wouldn't feel too bad about monetizing your site. In fact I think Google would prefer it especially with a product they see some money from(ad sense, Google Checkout, etc.). The cost to host a blog is typically less than the revenue cut they receive. It's a pretty fair deal for both parties starting out I think.
I simply wish there were a better way to receive small donations without the service charge eating up such a significant portion. As is it seems hardly worth donating anything less than about $10, otherwise the service fee really takes a big bite. I've been kicking around an idea to address that problem for several years now and just today discovered a commercial product similar to what I'd like to do. Although, I still prefer my idea ;0
Now, if only I had a team to implement it...
Love Google Checkout! Google is awesome because they allow free transactions to non for profit organizations through Google Checkout. Just got it up on my website check it out here http://www.mannaforhaiti.com/viagooglecheckout.html thanks!
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