What is Authorize.net? An In-Depth Analysis

Before diving into our review of Authorize.net, it’s important to understand the payment landscape that merchants navigate daily. For businesses accepting online payments, creating a secure payment environment for your customers is essential. Fortunately, payment gateways make it simple for customers to make purchases with credit cards online and within apps. They authenticate, encrypt, and communicate payment data to a merchant’s bank account, ensuring a seamless payment process. Authorize.net is at the forefront of the industry. The company provides merchants with a range of payment tools, but it’s most well-known for its payment gateways. However, with no shortage of options to choose from in the payment gateway market, it’s critical to know if this platform is right for your business.

This guide explores Authorize.net, its workings, features, pricing, and related topics. Read ahead if you’re looking for a new payment gateway for your business!

What is Authorize.net?

Authorize.net is a merchant service provider (MSP) offering payment gateways, payment processing, and eCheck services to its clients. The platform offers seamless digital payments and allows merchants to accept all major credit cards, including Visa, Mastercard, American Express, and Discover.

It also offers an all-in-one payment processing platform, which includes a payment gateway, merchant account, and eCheck compatibility. However, unlike many other payment gateway providers, Authorize.net is also compatible with third-party merchant account providers. It has a list of “preferred companies” for which it offers seamless integration. You don’t have to choose the platform’s in-house payment processing if you only want to use its payment gateway.

If you’re searching for “who is Authorize.net,” it’s also important to understand the company’s background. The payment gateway provider first began offering services to its customers in 1996. However, since its inception, it has been part of various acquisitions. Most recently, Visa acquired Authorize.net in 2010 for $2 billion.^[1]PracticalEcommerce. “Visa to Acquire CyberSource, Authorize.net.” Accessed on November 12, 2024.

How Does Authorize.net Work?

Authorize.net works similarly to other payment gateways. Let’s explore the process that occurs when a customer makes a purchase using an Authorize.net payment gateway:

• Step 1: A customer proceeds to check out on a merchant’s website or mobile application.
• Step 2: The customer inputs their credit card details and personal information and selects to finalize the purchase.
• Step 3: The payment gateway collects the information, encrypts it, and transmits the information to the customer’s issuing bank and the payment processor.
• Step 4: The payment processor and issuing bank check the payment details to confirm they are legitimate.
• Step 5: If the details are legitimate, and there’s no reason to suspect fraud, the payment processor and issuing bank authenticate the transaction.
• Step 6: Both the merchant and the customer receive a notification of whether the transaction is approved or declined.

While the above steps seem complicated, they all occur almost instantly.

Comprehensive Feature Set of Authorize.net

Authorize.net payment gateways come packed with features. Let’s check out the most popular features available on this payment platform:

From a merchant perspective, Authorize.net’s ease of use is one of its primary advantages. It’s easy to manage your payment gateway from a central dashboard. Whether you want to review reporting figures, customize payment options, set security limits, or manage any other tasks, it’s all accessible via the merchant dashboard.

From a customer perspective, Authorize.net payment gateways make it simple to enter credit card details and complete purchases. Likewise, merchants can customize the branding on the payment gateway portal, ensuring the customer has a checkout experience with the merchant’s logo, color schemes, etc.

While online payments have made it simple to access customers from across the globe, they’ve also increased exposure to fraud. North America is a hotspot for eCommerce payment fraud, with 42% of global eCommerce fraud occurring within the region.^[2]Mastercard. “Ecommerce fraud trends and statistics merchants need to know in 2024.” Accessed on November 12, 2024.

Fortunately, Authorize.net is hardwired to protect customers and merchants from payment fraud. The platform allows you to submit custom security settings to block specific types of payments, such as payments from an overseas country. Likewise, it uses advanced encryption to transmit data securely. Still, it’s always best to have strong fraud prevention strategies in place to prevent scammers from slipping through the cracks.

In recent years, we have seen the expansion of membership and recurring billing business models. Many entrepreneurs realize it’s more profitable to have a long-term, recurring relationship with customers. Research suggests subscription-based companies have grown 3.7x faster than businesses in the S&P 500 over the past 11 years.^[3]Zuora. “The Subscription Economy Index.” Accessed on November 12, 2024.

Authorize.net makes this business model easy to manage for companies of all sizes. Customers can select a subscription, and recurring bills will automatically be set up, with both credit cards and bank transfers being options for payment. Likewise, merchants can offer trial periods to help encourage customers to sign up for services. It’s easy to manage all your recurring billing reporting from the Authorize.net merchant dashboard.

Last but not least, Authorize.net offers secure customer data storage to help shield your business from cybercriminals. Customers trust your business with personal payment data, such as name, card details, and address, so secure information storage is critical. Authorize.net prides itself on its commitment to secure data storage and follows all PCI DSS compliance requirements.

Authorize.net Fees and Pricing Structure

Merchants have three different options when they choose Authorize.net. There’s all-in-one payment processing, payment gateway-only processing, or payment gateway and eCheck processing. Let’s explore each plan’s pricing structure:

Alternatives to Authorize.net

While Authorize.net is undoubtedly a robust choice for businesses seeking a payment gateway, there are other options available. Let’s explore three alternatives to Authorize.net:

NMI is another payment provider that is very similar to Authorize.net. One of the key similarities is that NMI offers both a payment gateway-only product and an all-in-one payment processing stack. This gives merchants the flexibility to bring their own merchant account if they don’t want to use NMI’s in-house payment processing. However, NMI offers more payment choices than Authorize.net, including extensive international payment options.

Previously, NMI was not sold directly to merchants — the company partnered with payment processors to provide payment gateway services. This means many payment processors advertising payment gateway products may be white-labeling NMI payment gateways. However, you can now request a callback from NMI on their website if you’re a merchant — the company doesn’t publicly advertise its pricing. As Authorize.net is more transparent and accessible, it’s much easier for merchants to set up.

Stripe is one of the leading small business payment processors in the United States. The company made a name for itself by creating sleek online payment tools for eCommerce businesses. Stripe offers an extensive list of APIs and additional features, many of which are fully customizable. However, with this customizability comes much more complexity for the merchant. To get the most out of Stripe, your business may need an in-house developer to integrate or customize its tools.

Square is another payment processor focused on SMEs throughout the United States. Its brand is synonymous with its compact square card readers that plug into auxiliary and charger outlets on smartphones. While there’s no doubt Square makes it easy to sign up for payment processing and access a range of online and in-person payment tools, there are some downsides. First, Square charges flat-rate pricing, so your business will likely pay more in processing costs over the long term. Secondly, Square is not suitable for high-risk merchants, as the platform may remove merchants’ processing rights without warning.

Braintree is another payment gateway particularly well-known for handling online transactions. In 2011, Braintree gained recognition for the introduction of its Vault technology, enabling customer data to be securely stored for speedier transactions. In addition to 45+ countries in North America and Australia, Braintree is available in Europe and Asia and can process over 130 types of currency from around the world. The platform is well known for its enhanced security features, using machine learning for fraud prevention. However, there is limited support for some local currencies and security measures can lead to transaction holds. It also may be challenging to use for smaller businesses and those with less technical skill because of its breadth of features and integration options.

Integration Capabilities

Authorize.net is partnered with dozens of certified solution providers and developers along with supported hardware and business services for you to integrate with. The platform also has an application programming interface (API) that allows you to handle a variety of tasks from accepting payments to storing customer information. Authnet’s developer’s guide also enables compatability with thousands of platforms and shopping carts. Here are just a few of these integrations and partners:

How to Get an Authorize.net Gateway

If you want to use Authorize.net’s all-in-one package, you can contact the company directly to set up payment processing. However, if you only want to use the Authorize.net payment gateway, you need a merchant account. Without this, the payment gateway won’t function.

Fortunately, there are plenty of Authorize.net payment gateway solutions to use with a merchant account. A merchant account provider will offer extra security features, dedicated merchant support, and a range of other useful tools. Contact us today to see what we can do for you!

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