What Is Authorize.net?

Kimberly Rotter

Kimberly Rotter | Reviews

Jul 08, 2014 | Updated Oct 30, 2015

Authorize.net is an e-commerce service provider that processes credit and debit card, e-checks and other electronic forms of payment. Authorize.net moves information between a payment portal (like a merchant’s website) and the bank or payment processor that transfers the actual funds.

Authorize.net is primarily a payment gateway, which is the online/mobile version of a credit card swipe machine. In order to accept payment online, a merchant needs a payment gateway and a merchant account (in which the payment is deposited). The payment gateway is the complex, secure infrastructure that safely transmits sensitive data like credit card numbers.

Authorize.net payment gateway services are available with or without a merchant account, a temporary account where payment funds are held until they are moved in batches to the merchant’s actual bank.

The level of reliability, security, service and value Authorize.net offers is as high as one could expect from any global financial industry technology company. Authorize.net comes from CyberSource Corporation, a wholly owned subsidiary of Visa; it is a global leader in the payment gateway and e-commerce solutions industries. The infrastructure behind its products is cutting edge.

Authorize.net users can accept all major credit cards, signature debit cards, electronic checks and international transactions (for merchants in the U.S., Canada, U.K., Europe and Australia). Basic fraud prevention features are built into the service. Merchants can easily manage their accounts online.


The standard payment gateway service package is priced as follows:

Setup $99.00
Monthly gateway fee $20.00
Transaction fee $0.10
Batch fee $0.25
Optional merchant account fees:
Setup $0.00
Monthly service fee $9.95
Transaction fee $0.25
Visa/MasterCard/Discover qualified discount rate 2.19%
Minimum monthly processing fee $25.00

In the past, Authorize.net was seen as an expensive alternative to PayPal that only made sense for high-volume merchants. Now, Authorize.net offers “Simplified Account Pricing” for merchants who process less than $2,500 per month in payments.

The simplified account package is priced as follows:

Setup $0.00
Monthly gateway fee $0.00
Transaction fee $0.00
Batch fee $0.00
Merchant account fees (billed by provider):
Visa/MasterCard/Discover qualified discount rate 2.90%
Transaction fee $0.30
Verbal authorization fee $1.20
Chargeback $15.00
Early termination Waived

When compared with the standard service, the exact break-even point depends on the number and dollar amount of the merchant’s transactions. But the lower discount rate alone makes up for the added expense of the monthly gateway fee on a higher volume account.

Optional services are available on either plan for additional cost:

Advanced fraud detection $9.95/month
Automated recurring billing $10.00/month
Secure customer information manager that allows your website to save payment information for customers who desire it $20.00/month
E-Check option that allows payment by check (often cheaper than credit card payments) $10.00 minimum/month$0.35 transaction fee0.55% – 0.75% discount rate, based on monthly volume

Complaints And Praise

Bear in mind that angry customers are far more likely to write reviews than satisfied customers in all industries, so readers are far more likely to encounter negative reviews than positive ones (few people feel the need to vent loudly about a good experience).

That said, most complaints about Authorize.net focus on billing and collection issues like unexpected fees and charges, and customer service issues such as being unable to reach and/or offended by the customer service rep’s attitude, especially in the context of a cancellation concerning billing and collection. Examination of the complaints and responses on the Better Business Bureau’s website reveals that dissatisfied customers tend to be those who did not understand the terms they agreed to.

More importantly, happy customers praise Authorize.net for offering an indispensible service that works reliably, with accessible and effective customer support. In addition to smooth and secure operations, Authorize.net offers many valuable features, including the ability to guide the customer through the payment process without ever leaving the merchant’s website. This is a key requirement for many online sellers.

A discussion of Authorize.net is not complete without at least a brief comparison to PayPal, one of Authorize.net’s main competitors. PayPal offers comparable products at similar prices. For consumers who are happy with PayPal, there is little reason to switch. On the flip side, an entire population of consumers who want nothing to do with PayPal has evolved (not unusual for massive service providers who enjoy little competition).

PayPal’s BBB complaints outnumber Authorize.net’s by a factor of 32. PayPal is also the subject of numerous third-party websites that are purely dedicated to complaints and calls to action against the company. For those customers, Authorize.net is an excellent – probably the best – alternative.

Should You Use Authorize.net?

The last thing any merchant wants is technological difficulty or a malfunction involving its money or its customers’ money. Credit card payment processing cannot be avoided, and certain marketing efforts depend on maximizing the amount of time the customer spends on the merchant’s site.

Authorize.net offers valuable key services at affordable prices. It is secure, reliable and competitively priced, and has spent the last couple of years beefing up its small-merchant low-price offerings. Prices have gone down and the quality of support has gone up.

Authorize.net and its resellers now serve hundreds of thousands of merchants worldwide. Online merchants should call the sales department at 888-447-3938 to discuss the most appropriate plan, features and costs.

The caveat is that do-it-yourself merchants who do not outsource website and e-commerce development should read the small print and take the initiative to fully understand the product before purchasing it. In fact, read the online complaints so as not to get caught in a similar conflict because you didn’t know how the product works, what it costs or what questions to ask. Take the time to work with Authorize.net’s support team to install and use the product properly.

Learn everything you need to know about credit cards here »
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