Authorize.Net is one of the oldest and most popular payment gateway providers for eCommerce. Established in 1996, the company is headquartered in American Fork, Utah. Authorize.Net was acquired by CyberSource in 2007, and CyberSource was in turn acquired by Visa in 2010. The company has provided payment gateway services to over 400,000 merchants since inception.
Before we delve into all of Authorize.Net’s services, let’s clear up a common misconception: Authorize.Net is not a merchant account provider. They provide a payment gateway and several ancillary products and services that integrate with it. While they can set you up with a merchant account if you don’t already have one, that account is actually provided by a third-party processor.
You can get a payment gateway from Authorize.Net in one of two ways. First, you can sign up with them directly. This works best if you already have a merchant account through a provider that doesn’t have a partnership with Authorize.Net. Second, you can get a merchant account through one of the many merchant account providers that partner with Authorize.Net. There are a lot of them, including Dharma Merchant Services, one of our most highly-rated providers. For a full list of partners, see Authorize.Net’s reseller directory. Which option is best for you will depend on the nature and size of your business, as well as whatever existing merchant account services you’re already using. For many merchants, getting an Authorize.Net gateway through their existing merchant account provider will be less expensive, as many providers will waive the gateway setup fee and offer lower monthly gateway fees.
Regardless of how you get your payment gateway, Authorize.Net provides a solid service. In addition to a basic payment gateway, you’ll get a fraud detection feature, simplified checkout system, support for automated recurring billing, a customer information manager, and QuickBooks support – all for free. eCheck processing is also available for a low additional fee.
You can also turn your computer into a virtual POS terminal with Authorize.Net’s free Virtual Point of Sale (VPOS) software and a USB magstripe card reader. While you’ll have to provide your own card reader, they’re inexpensive, and it’s a worthwhile investment if you’re selling both online and through a retail location. Virtual terminals allow you to process credit cards without the need for a terminal or dedicated POS system, while still qualifying for swiped (i.e., card-present) processing rates.
Our one major criticism of Authorize.Net is its lack of data portability. While the Customer Information Manager feature is extremely handy for storing customer’s contact and payment method information, it’s not possible to transfer that data to another system if you should ever decide to change from Authorize.Net to a different payment gateway. If you jump ship to a different gateway after building up a large database of customers, you’ll have to re-input all that data from scratch. This is not only time-consuming but will also lead to lost sales as frustrated customers take their business elsewhere.
If data portability is a concern to you, you might want to consider Braintree as an alternative gateway provider. There is a downside, though. While Braintree provides its payment gateway as a free feature of its payment processing services, it charges $49.00 per month + $0.10 per transaction if you just want to use their gateway with your existing merchant account. This won’t be cost-effective for a lot of merchants.
Overall, Authorize.Net rates a solid 4 out of 5 stars. Their service performs well and offers a number of additional features that make their gateway more than just a way to accept credit cards over the internet. They also back it up with excellent customer service and support.
Authorize.Net is available to merchants in the United States, Canada, United Kingdom, Europe, and Australia.
Products and Services:
Here are all the standard and optional features that Authorize.Net offers:
- Payment gateway. Naturally, every account with Authorize.Net includes access to their payment gateway. For more information on how gateways work, see our Complete Guide to Online Credit Card Processing With a Payment Gateway.
- Merchant account. While Authorize.Net is designed to work with your existing merchant account, they can also set you up with a merchant account if you don’t already have one. These merchant accounts are underwritten by a number of third-party providers, so their fees and terms will vary depending on which provider they assign you to.
- Virtual Point of Sale (VPOS). The browser-based VPOS software allows you to manually key-in transactions on your computer. You can also add a USB-connected magstripe card reader for swiped transactions. While the software is free, you’ll have to buy your own compatible magstripe card reader. Support for EMV cards is planned in the coming months. Also, note that the VPOS software is currently Windows-only.
- Apple Pay support. Authorize.Net supports in-app payments using Apple Pay. Support is currently available only to US-based merchants. See their FAQ for additional requirements.
- Authorize.Net mPOS Mobile Payments. Like just about everyone these days, Authorize.Net has an app that can accept mobile payments in conjunction with a smartphone or tablet and a plug-in card reader. The app is available for both iOS and Android. While the app is free and this feature is included with your account, you’ll have to purchase your own card reader. Choices include the IDTech Shuttle Two-Track Secure Magstripe Reader, which is magstripe-only and costs $42.88, or the AnywhereCommerce Walker C2X Magstripe and Chip Reader, which supports EMV and NFC payments and costs $98.00. Both readers plug into the headphone jack. See Authorize.Net’s list of supported devices. EMV payments are currently only available through supported processors.
- Simple Checkout. Although Authorize.Net’s ability to integrate with a huge number of third-party online shopping carts is one of its stronger features, many merchants don’t need something that powerful. Simple Checkout lets you generate HTML code snippets for “Buy Now” and “Donate” buttons to add to your website.
- Advanced Fraud Detection Suite™ (AFDS). Included for free with your account, AFDS consists of a set of thirteen filters that you can customize to your own needs to help flag and block potentially fraudulent transactions. This helps to prevent inventory loss due to fraud and lowers your liability for chargebacks.
- Automated Recurring Billing™ (ARB). Subscription-based billing is more popular than ever, and ARB allows you to customize not only pricing but also features such as free trial periods and installment payments.
- eCheck.Net®. This is an optional feature, and additional fees apply. You can add eCheck processing to your existing merchant account or sign up for the eCheck Only Pricing Plan.
- Customer Information Manager (CIM). One of Authorize.Net’s most powerful standard features, the CIM allows you to securely store customer information such as billing address, shipping address, and payment method information. Because this includes your customers’ sensitive credit card information, the data is securely encrypted. As we’ve noted, however, this security comes at the expense of data portability.
- Sync for QuickBooks™. While QuickBooks integration is a fairly standard feature these days, it’s still nice to have and will keep your accountant happy. Especially if that accountant is you.
Fees and Rates:
Before we dig into what you’ll pay for an Authorize.Net gateway, let’s clarify one important thing: the rates quoted below are only applicable if you sign up directly with Authorize.Net. Many merchant account providers not only offer access to the Authorize.Net payment gateway, but they’re also able to waive some fees and negotiate lower rates and fees than what you’d pay if you signed up directly with Authorize.Net. In other words, the pricing below represents the full retail price for their services. If your merchant account provider wants to charge you higher rates than those listed below – don’t do it.
Authorize.Net features two pricing options on their website: a gateway-only plan and a gateway + merchant account plan. If you already have a merchant account, you’ll want the gateway-only option. Be aware, however, that it might be more cost-effective to get an Authorize.Net gateway through your existing merchant account provider if they offer it. If you also need a merchant account, Authorize.Net partners with a large number of resellers to provide the gateway + merchant account option. Again, it might be more affordable to go directly with one of these resellers rather than having Authorize.Net set up your merchant account. The main factor here is the relatively high flat-rate processing fee for the gateway + merchant account option.
Here are the listed prices for both options:
Payment Gateway Only:
- $49.00 account set up fee
- $25.00 per month gateway fee
- $0.10 per transaction processing fee (this is in addition to any fee charged by your merchant account provider)
- $0.10 daily batch fee
Payment Gateway + Merchant Account:
- $49.00 account set up fee
- $25.00 per month gateway fee
- 2.9% + $0.30 per transaction processing fee
There is also a $25.00 per occurrence fee for chargebacks. International transactions will pay an additional 1.5% assessment. Finally, a small footnote points out that “partner merchant account fees may vary,” meaning that you might have even more fees to pay depending on which one of their resellers is providing your merchant account.
Every account through Authorize.Net includes the Advanced Fraud Detection Suite, Automated Recurring Billing, Customer Information Manager, and QuickBooks integration features for free. eCheck processing, if you need it, is 0.75% per transaction.
Contract Length and Early Termination Fee:
Authorize.Net advertises “no long-term contracts” and “no cancellation fees” on their website, and for the most part, this is true. Use of the Authorize.Net gateway is on a month-to-month basis, so you can cancel at any time without penalty. If you also go through Authorize.Net for your merchant account, be aware that things might be different. While many of their resellers (especially Dharma Merchant Services and Merchant Focus) will honor these guarantees, others are free to set their own additional terms and conditions, and some of them might impose a standard three-year contract with an early termination fee. Once again, you’re probably better off going directly through your merchant account provider to get an Authorize.Net gateway. You’ll have more room to negotiate, and you can probably get a better deal than the standard fixed-price 2.9% + $0.30 processing rate. In any event, be sure to fully review your contract before signing it.
Sales and Advertising Transparency:
As a tech-focused company, it should come as no surprise that Authorize.Net has an excellent website. The design is clean, and the layout makes it easy to navigate. There’s even a site map and a search function if you’re having trouble finding information on a particular topic. Best of all, it doesn’t come off as “salesy” the way so many other websites in this industry often do. In other words, there are no flashy sales gimmicks and no picture-perfect stock photos of perpetually happy customers.
One possible point of confusion that still occasionally comes up in complaints is that Authorize.Net is a gateway provider only, not a merchant account provider. If you need a merchant account, they will set you up with one of their resellers to provide this service. While they do point this out on their website, they probably could be a little clearer about explaining it. They also don’t disclose which particular reseller they’ll set you up with, and while there are valid reasons for this, be aware that there is a lot of variability in the quality of service among their numerous resellers.
I should also point out that there’s no mention of Authorize.Net’s lack of data portability anywhere on their site. While I wouldn’t expect any company to advertise their shortcomings right on their website, it’s an issue that you definitely need to be aware of before you sign up and start accumulating customer information.
Authorize.Net has an active social media presence, with accounts on Facebook, LinkedIn, and Twitter. The latter includes network status updates, so you’ll want to follow them to keep up with any outages. They also have a YouTube channel, which features both tutorials and customer testimonials.
Customer Service and Technical Support:
In addition to the numerous articles, white papers, and video tutorials found on their website, Authorize.Net has an exceptional knowledge base on the Support Center section of their website. If your problem is a common, easily-solved one, you should be able to diagnose and fix it using the technical information found here.
If your problem is more involved, you can also access their telephone support system, which is now available 24 hours a day, seven days a week (except major holidays). Authorize.Net has a great reputation for excellent customer support, so you should have no problems getting your issue resolved.
One thing to be aware of, however, is that Authorize.Net’s customer support is for its payment gateway only. If you’re having a problem with your merchant account, you’ll have to go through your merchant account provider.
Negative Reviews and Complaints:
Authorize.Net has been accredited by the BBB since 2009 and has an A+ rating. They currently have 136 complaints filed within the last three years, with 60 of those complaints being filed within the last twelve months. If this sounds like a lot, remember that they’re the most popular payment gateway provider in the country. With such a large customer base, they’re bound to have some unhappy campers, and this number is actually quite reasonable under the circumstances.
You’ll find an additional 35 complaints on Ripoff Reports. On both sites, a common thread was merchants misunderstanding that Authorize.Net only provides a payment gateway, not a merchant account. Many of these complaints raise issues that relate to the customer’s merchant account and should have been directed there instead of against Authorize.Net.
Despite this, the company is very thorough in offering detailed explanations of what went wrong and tries to correct the situation whenever they can. So, let’s be clear: if you have an issue that doesn’t involve the payment gateway itself (i.e., account holds or terminations), you need to address those complaints to your actual merchant account provider, not Authorize.Net. They can’t help you, and misdirecting the complaint against them lets the actual offender (i.e., the merchant account provider) off the hook.
That said, complaints against Authorize.Net include the following:
- Set-up and monthly fees are generally non-refundable. This isn’t so much a valid complaint as a general policy. Unless there was a genuine mistake on the part of Authorize.Net, they won’t issue a refund. Again, the issues that lead to a customer wanting a refund in the first place are usually the fault of the merchant account provider, not Authorize.Net.
- Data portability. As we’ve noted previously, Authorize.Net’s Achilles heel is their lack of data portability. While their Customer Information Manager is a powerful and useful feature, it won’t do you any good if you ever try to leave Authorize.Net for a different gateway provider. While the company claims this is necessary for “security reasons,” the fact is that competing gateway providers such as Braintree offer this feature. It’s both secure and PCI-compliant. At this point, it certainly looks like the company is deliberately resisting introducing a data portability feature to keep current customers from switching to a competing provider.
Positive Reviews and Testimonials:
Customers who are very satisfied with the quality of service they receive from a provider rarely take the time to leave positive feedback on their own initiative, so it’s often left to the providers themselves to “blow their own horn” by posting testimonials from satisfied merchants on their websites. Often, these testimonials are less than convincing.
That’s not the case with Authorize.Net. They’ve put together a very compelling series of video testimonials and case studies (both videos and articles) from customers around the country and posted it on their website and YouTube channel. While some of the videos come across as overly scripted, the case studies really shine by tying specific features of Authorize.Net’s service to the needs of the merchant providing the testimonial.
Final Verdict on Authorize.Net:
Authorize.Net follows the maxim of doing one thing and doing it well. They provide a payment gateway and numerous ancillary services to support that gateway – and that’s it. While you may or may not need options like eCheck processing and mobile payments, it’s nice to know they’re available and perform well for merchants who require them. Basic features of their gateway service such as the fraud prevention filters will be useful to everyone using their service.
The lack of data portability is still Authorize.Net’s one major flaw, and it’s the main reason they don’t get a perfect score. With competing providers now offering this feature in a PCI-compliant manner, the company needs to find a way to do this if they want to maintain their dominant position in the payment gateway provider industry over the long term. That said, the lack of data portability will only become an issue if you want to leave Authorize.Net for a competing provider, and the high quality of their service is such that you probably won’t have reason to do this.
If you’re looking for a payment gateway, Authorize.Net is a solid choice. They have the features and options to cover all of your business needs and the excellent customer service and support to back it up. One important caveat is that in many cases it will be less expensive to sign up for an Authorize.Net gateway through one of their resellers rather than going directly through the company itself. Many of the company’s resellers will completely waive the $49.00 account set up fee, and their monthly gateway fees will be discounted from the $25.00 per month that Authorize.Net charges. You also won’t be stuck with a high, flat-rate processing charges. There are a lot of resellers out there, so shop around!
Authorize.Net scores a solid 4 out of 5 stars for now, with the lack of data portability and the high flat-rate pricing on their bundled merchant account being the only issues that keep them from earning a higher score. Have you had any experience using Authorize.Net? If so, please feel free to leave your feedback in the Comment section below.