Authorize.Net is a gateway service for merchants who own online stores or take payments online. If you run an ecommerce site, they're a decent option for a gateway, but it generally makes more sense to sign up with them via a merchant account service provider that includes Authorize.net access as a perk of its package. In sum, use them as an included item with your Merchant Services Account, buying their service directly doesn't make much sense.
Authorize.Net, a VISA company and an offshoot of CyberSource, has been in the business of accepting online payments since 1996. Authorize.net serves a dual role as a merchant account services reseller, and as a gateway for other credit card processors. Confused? We'll try to clear it up.
Authorize.net's main business is as a gateway. A gateway is the piece of online software that allows you to accept credit card payments online and keep them secure. Think of it as a credit card terminal or swiper for online transactions. Thus, a gateway is a must-have for anybody doing lots of online transactions, like an ecommerce store. BUT, you still need a merchant account to process the transaction. All Authorize.net does is securely send the credit card details of your customer from your website to your merchant account. They don't also process the transaction, your merchant account does that.
This is where it starts to get really confusing. Authorize.net also sells merchant account services on behalf of their partners on their website. So, if you go there, you'll see logos for all sorts of other companies. At the same time, if you go to any random merchant account services company, you're likely to see that company selling Authorize.net (or offering it as part of their service).
So, the whole thing is really confusing to most business owners. What you need to know is that Authorize.net is really a gateway (that happens to try to sell Merchant Services which are provided by other companies on their website). And you can "buy" their services either directly, through their website, or, more likely, indirectly, as an add-on or freebie included in a package with your merchant service account.
As to who should consider using Authorize.net...if you have an ecommerce site, Authorize.net is, perhaps, the most trusted company from a consumer's perspective, so your customers will feel secure using your shopping cart. Authorize.Net provides every single product and service that a merchant might need to take online payments, including eCommerce integration and payment methods that range from checks to contactless cards. We feel their charges are reasonable, considering the services they offer. Just remember that merchant accounts are handled through resellers, and those accounts can create some headaches for business owners.
Below is a detailed review of Authorize.net Merchant Services offering. The review is broken down into the following categories.
Depending upon the type of business you own, some of the following features may or may not be important to you.
Authorize.net has several features that are important to merchants that take payments online.
|Microsoft Dynamics GP||Possibly|
|Windows / Blackberry||No|
|iPhone / iPad||Yes|
|Alternative Transaction Types:|
|Snail Mail Orders||Yes|
|American Express (AMEX)||Yes|
|Add Tips to Bills||Yes|
|eCommerce / Shopping Cart||Yes|
|EMV Chip Cards||Yes|
|Loyalty / Gift Cards||Giftango|
|eChecks / Electronic Checks||Yes|
|Welfare Benefits (EBT/SNAP/TANF)||Yes|
|Security / Fraud Prevention:|
|AVS Fraud Protection||Yes|
|PCI DSS Secure Transactions||Yes|
|HIPAA Compliance (Healthcare)||Yes|
|Trust Account Debiting (Legal)||No|
|Fleet Cards (Petroleum)||No|
|Online Menu Orders (Restaurants)||Yes|
Now I need to clarify some of those "yes" comments above:
Almost Every merchant account services company uses either Interchange Plus or Tiered Pricing (read more about this topic here). Where companies allow us to disclose pricing information, we show the deals that our secret shoppers were able to achieve. When companies offer both Interchange Plus and Tiered Pricing, we try to get a quote on both options.
Our Experience: Authorize.Net is very upfront about their costs, but sometimes you need to look at everything a merchant account service offers to learn about the hidden costs. We'll address those "gotchas" in the Fine Print section below. The immediate costs are listed here:
This is obviously a very expensive rate. That's because Authorize.net doesn't focus on this part of their business (selling merchant services). Rather, they want to be a gateway that merchant services companies can offer in their bundle. In addition to this fixed rate, there are other fees listed below and an additional 1.5% assessment per transaction for international sales. Authorize.Net relies heavily on resellers for merchant accounts, and they're very upfront about this deal. They list their major partners, and they also have a state directory.
The reason Authorize.Net lists these resellers is mainly to provide their resellers with exposure, but Authorize.Net also wants to sell you their merchant account services. With that said, you may discover two things: 1. That a reseller can offer you a deal that Authorize.net may not offer, and; 2. That Authorize.Net also maintains a gateway account specifically for customers who have a merchant account with one of their resellers.
If you do decide you want to go the reseller route and that reseller provides you with a merchant account, you can then go directly to Authorize.net's Payment Gateway that offers different fees:
That is, you pay whatever your merchant services company charges you for the transaction, and then you pay an additional $0.10 which goes to Authorize.net for the use of their gateway.
That's it...except for other charges that we'll show below in the Fine Print.
We found more documentation than we could handle in one day when perusing through Authorize.Net's site. What we'll do here is show you the fine print fees for using Authorize.net alone first. Then we'll provide you with the fees Authorize.net charges for merchant accounts through resellers.
|Fine Print Fees:|
|Setup / Application Fee||$49|
|PCI Compliance Fee||None|
|PCI Inaction Fee||None|
|Online Reporting Fee||None|
|Monthly Minimum Volume Fee||None|
|Accept International Pymt Fee||None|
|Voice Authorization Fee||None|
|Monthly Min. Process Fee||None|
|Daily Batch Fee||None|
|ACH / Direct Deposit Fee||Yes, third party|
|ACH Charge Fee||Yes, third party|
|ACH Return Fee||None|
|Free Support 24/7 via Phone, Email, and chat|
|Free Fraud Detection Suite|
|Free Automated Recurring Billing|
Authorize.Net also offers many other features. Some are free, some are not, and some are third-party features such as ACH (eCheck). Also, international fees usually are assessed if the merchant is international, because those fees are created with an international Cybersource (not Authorize.Net) account. Before you sign up, I suggest that you read through Authorize.Net's site and watch the videos. You can learn a lot about what you might need or might not need through these materials.
One thing I do want to point out here - Authorize.Net is a powerful system and one of the best to integrate with shopping carts. However, if you house your merchandise at an online shopping "mall" or if you're only selling one item (like a book), you have better and much less expensive options available. In fact, that online mall may offer credit card processing services for their store owners. Don't be surprised if they use Authorize.Net (Shopify or Volusion, for example).
|Fine Print Fees:|
|Setup / Application Fee||$49|
|PCI Compliance Fee||None|
|PCI Inaction Fee||None|
|Online Reporting Fee||Possible|
|Monthly Minimum Volume Fee||Possible|
|Accept International Pymt Fee||xxxx|
|Voice Authorization Fee||Possible|
|Monthly Min. Process Fee||Possible|
|Daily Batch Fee||Possible|
|ACH / Direct Deposit Fee||Possible|
|ACH Charge Fee||Possible|
|ACH Return Fee||Possible|
|Free Support 24/7 via Phone, Email, and chat|
Note that the reseller may have terms to follow as well as those rendered by Authorize.Net, which is why we replied "possible" to many features. You need to read all contracts thoroughly and ask questions about those features. It's very important to note that merchant account fees are billed separately by your merchant account provider of choice.
Our Take: If you don't want to deal with the confusion of working with Authorize.net's gateway AND a reseller, then don't use Authorize.net at all. Using them directly, for anybody but the largest ecommerce sites makes no sense. We've seen horror stories about merchants who tried to change banks or to discontinue services have extreme difficulties because their new provider wasn't Authorize.net compatible.
While your transactions usually take place electronically, the actual device that you use to swipe a customer's card is referred to as "the equipment." This equipment includes hardware and, often, software or apps for that hardware to function properly.
Authorize.Net offers a straightforward virtual terminal that integrates into most ecommerce websites. If you ignore our advice and decide to buy their service directly (instead of through a Merchant Account Services company) Authorize.net will provide you a free card reader for those merchants who want to use their mobile phones or tablets for face-to-face sales. Traditional terminals, however, are provided only by resellers, who may offer different pricing on Authorize.Net gateway service than the prices that we share in this article. So if you want to have a traditional terminal and use Authorize.net's gateway, you have to go through a third party Merchant Services company.
Terminal: If you'd prefer to use a traditional credit card machine, Authorize.Net provides directories of resellers who work with them. These resellers can provide you with traditional hardware on separate contracts. The gateway fees for these "merchant accounts" are different from those that offer only the virtual terminal and card reader.
Card Readers: According to Authorize.Net, VPOS-compatible swipe card readers can be purchased from a variety of POS providers for approximately $50.00 - $80.00. You can also get a free one, if you sign up directly to Authorize.net without going through a reseller.
Various Software Management Systems: Authorize.Net's virtual terminal provides merchants with the ability to take a wide variety of different types of payments from any Internet-connected computer. This software also accepts payments via swiping. This software, by the way, allows eCheck processing without hardware.
You can accept international transactions from customers worldwide. However, your business must be located in the U.S., Canada, United Kingdom, Europe, or Australia. Authorize.Net provides services 24/7 to and from businesses in the U.S. For international transactions, use their parent company, Cybersource Advanced Solution.
I generally don't like long-term contracts or termination fees in merchant services agreements, because the ability to cancel keeps the credit card processor on its best behavior, including the willingness to make you happy if there's a dispute. Plus, this ability to cancel gives you the ability to move on if you find a better deal.
Authorize.Net and their merchant gateway both contain month-to-month options with no early termination fees. If you go the reseller route, however, that reseller may have a contract that you need to honor, especially if you lease equipment from the reseller.
The merchant account services industry is multi-layered. Understanding how those layers fit together can be confusing (Read More in this Article). A good thing to know, however, is whether or not your company is a direct processor (good if yes) or, if not, then to know who they process with and whether or not that processor is reliable. The second thing to know is whether or not the service or sales staffs are in-house or outsourced. In-house staffs are preferable for you, as these staff members may have more access to sources that can resolve your issues.
Processor:Authorize.Net's parent company is CyberSource, and VISA purchased both companies in 2010. This gateway service is one of the largest in the world and, as such, is the focus of cyber attacks. One attack in 2009 left merchants without the ability to process any payments for an entire week. Beyond this issue, Authorize.Net has proven to be one of the most secure gateways around.
Account Sales: Authorize.net relies heavily on resellers for their marketing. In fact, you, too, can become a reseller. Authorize.Net maintains a section in their site that shows you how you can sign up and participate.
Account Service: Authorize.Net provides free customer support via toll-free telephone, email and online chat. Representatives are available Monday through Friday, 5 AM to 5 PM Pacific Time. They're not open on major holidays.
As part of our review process, we try to test out the claims made by the Merchant Account Services provider by placing a few test calls, and working through the customer service process.
2/12/2015; TIME: 1:00 EST
Call to Customer Support
I called the number on the support page and I was greeted by an automated voicemail recognizing the company as CyberSource. I tried the receptionist first, and I got entangled in a phone tree that offered a wide variety of numbers for sales and support.
2/12/2015; TIME: 1:05 EST
Call to Customer Support
This time I pressed the button for support, and was greeted by an Authorize.net voicemail that asked me to choose among various options, including merchant account support, and three options for reseller accounts.
2/12/2015; TIME: 1:06 EST
Call to Customer Support
This time I tried sales and was greeted by an Authorize.Net voicemail after the CyberSource initial contact. I waited just a few seconds before Karen answered the phone. She responded in native English and stated that their support team was all in-house. Even if I went through a reseller, I would work with Authorize.Net's support team to work through any issues, especially during the setup phase.
Our Take: We found it interesting that CyberSource offered a variety of language options in their phone tree, and we presume that those calls would be directed to in-house support in various countries. Karen did ask for my email to send more materials - this is a great option for merchants who want to study every aspect of this gateway service before a purchase.
We scoured the web to find past and current customer complaints about this processor. Then, we investigated those complaints that seemed legit and provide our verdict on how well the processor handled the issues. Interestingly, we learned that Authorize.Net's main complaint centers on the fact that the merchant never realized the difference between a credit card processing service and a gateway service.
This complaint came mainly from small business owners who didn't realize that they would need to pay for merchant account services on top of a gateway fee when working with resellers.
Learning about credit card processing services is a huge learning curve for many small business owners. We can't know how many of these business owners acquired their Authorize.Net services. I suspect, however, that many of these individuals bought Authorize.Net directly, and thus didn't have an accompanying merchant service account. We've seen many "surprises" that led me to believe that the merchant was unaware that Authorize.net was just a gateway.
Again, this complaint comes mainly from smaller business owners who were "surprised" to learn about Authorize.Net's participation in their business. While the bank was willing to close the merchant account, it appears that some merchants' banks didn't offer to close the gateway account at the same time.
Ditto on our previous verdict...all we can say is this: If you seek merchant services from your bank or any other business that claims to offer credit card processing, be sure to check out their company history, including any company they may use for those services. You may decide to avoid that middle man and use another service instead.
This is our complaint. As we plowed through Authorize.Net's site and other sites that contained reviews about this company, we learned that some services are free on one page and not free on other pages.
Sloppiness. We've learned that Authorize.Net cut their setup fees in half over the past year, and other pricing changes also have occurred. It appears that there is so much information on the Authorize.Net site that even their content developers have missed a page or two. We want you, the consumer, to be aware of this issue so that you ask questions instead of taking any price or freebie at face value.
|PCI Compliance Fee||$0.00|
|Online Reporting Fee||$0.00|
DISCLOSURE: Advertising, Affiliate and Conflicts of Interest: Merchant Negotiators accepts advertising via the Google Adsense platform, directly from advertisers, and has common parent ownership interests with other payments related companies leading to conflicts of interest. Read our Affiliate / Conflicts / Advertising Disclosure for a more detailed disclosure.
About the Reviews: These reviews, and for that matter any reviews, are inherently subjective, and should be regarded as our opinion, not as a statement of fact. Selecting a merchant services provider is an important decision, and we urge you to use no single source of information as the basis of that decision.
About the Pricing: This pricing is an estimate based on limited available information. In some cases, the Processors' pricing information was provided directly by the company, in others, we obtained it from public information, through calls to the company, or through past or current clients of the company. Where, despite these efforts, we were unable to obtain any information about certain fees, we used estimates based on similar providers in the industry. While we're working, in some cases, with the company directly to get more accurate pricing, even in those circumstances, we can't guarantee the pricing's accuracy. Complicating all of this, is that for some companies individual salespeople are given authority to modify terms on a deal by deal basis. In any case, if you know of an error, please let us know and we'll fix it.
About the Calculations: With respect to your estimated savings, this is based on a lot of factors and some hard math. The reason we do it, along with the "Actual Gross Rate" calculation is that every Processor prices their product differently (e.g. interchange v. 3 tier v. 4 tier v. flat v. membership, etc.) and some make it intentionally complicated or opaque. Trying to convert their pricing structure to a consistent "Overall Cost of Processing" is the only way you, the merchant, can do an apples to apples pricing comparison and know whether an offer is actually a good deal. Our system isn't perfect but we're trying.
Conclusion: In sum, these rankings, ratings, and scores are inherently subjective, and should be regarded as our opinion and not as a legal statement of fact. Moreover, use these prices and estimates at your own risk, and make sure to verify the pricing you see here in any formal contract you receive. Finally, if you do find something wrong in our pricing, terms, etc., tell us and we'll try to fix it.
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