Six Payment Gateways Reviewed
Offerings from Authorize.net, Verisign, Plug 'n Pay, and LinkPoint are compared.
Author: Jim Conners
Rating: 10.0
Authorize.Net
Authorize.Net, founded in 1996, has become synonymous with the word 'gateway'.
Features
Fraud Prevention
The Authorize.Net Fraud Detection Suite (FDS) is designed to identify fraudulent transactions before your product ships (and you're hit with a chargeback). The suite's features include:
- an amount filter that sets upper and lower value limits for "acceptable" sales
- a velocity filter that limits the number of transactions that can be received per hour from a given customer
- an address mismatch filter that detects instances in which billing and shipping addresses differ
- an IP filter that isolates suspicious activity from one IP address
- a suspicious transaction filter based on Authorize.Net's own criteria
- IP blocking functionality, which allows you to block the IP addresses of known frauds
Recurring Billing
This is straightforward: supply your customer's credit card details, billing amount, payment interval, the length of the subscription, and a recurring billing account is created. No further interaction is required.
eCheck Processing
The Authorize.Net eCheck system is robust and full-featured, with many capabilities. Any merchant who's considering processing eChecks will find Authorize.Net's solution an excellent choice.
Choice of APIs
This is one of the strongest features of Authorize.Net: merchants are able to choose between two different integration methods for the same price. You can switch methods at any time, and all features are available regardless of which method you choose.
The available integrations methods are:
- The Simple Integration Method (SIM): Not surprisingly, this is easiest method to set up, with virtually no programming, and no SSL certificate, required. Your secure order page is hosted directly on Authorize.Net's secure server, but it can be customized to match the look and feel of your Website.
- The Advanced Integration Method (AIM): This method allows programmers to make the checkout process completely seamless and transparent. Customers never leave your Website, as transactions are conducted server-to-server, behind the scenes. This method gives you complete control over the front-end, and your customers' experience of your site.
Cost
Authorize.Net doesn't list service pricing on its Website because it doesn't sell directly to merchants. Interested merchants need to contact one of the authorized resellers listed in the directory.
Pricing varies by reseller, but here are some rough guidelines:
- Set-up fee: Set up costs range from $25 to $300 (the average being $100). This fee usually does not include recurring billing or other value-added services. Some resellers allow you to reduce the setup fee if you agree to pay a higher monthly fee.
- Monthly fee: Monthly fees can range from $10 to $30 per month, averaging $15. This fee covers processing statements and the provision of merchant support.
- Transaction Fee: In addition to the transaction fee charged by your merchant account provider, Authorize.Net will charge an additional transaction fee of its own. This fee will vary from 5 cents to 15 cents, with 10 cents being average. Some resellers have the ability to offer free transactions, as Authorize.Net rewards active resellers by allowing their merchants to process their first 250 transactions each month for free. If you expect to make fewer than 250 transactions per month, you can essentially avoid transaction fees if you use a reseller that offers this discount.
- Recurring Billing: Authorize.Net's recurring billing feature is not a standard feature: it incurs additional cost in the form of a set-up fee and a monthly recurring fee. Setup fees run from $40 to $100, with $50 being average. The monthly fee will range from $20 to $40, with $30 being average.
- Fraud Detection Suite: Authorize.Net's Fraud Detection Suite also incurs additional setup and recurring fees. The setup fee ranges from $25 to $50, with $40 being average. The monthly costs vary depending on volume. If your business conducts no more than 100 transactions each month, your cost will be between $8 and $20, with $13 being average. If your business conducts between 101 and 1000 transactions, the FDS will cost between $15 and $50, with $30 being average. If your business conducts over 1,000 transactions each month, you'll be looking at a range of $50 to $150 per month, with $100 being average.
- eCheck: eCheck services through Authorize.Net are handled differently then their other services. Pricing is not set by resellers. However pricing will still vary from merchant to merchant as Authorize.Net sets it rates on a case-by-case basis with fees being determined by the risk associated with the account. However, most merchants typically pay a $49 application fee and if approved a $100 setup fee. Each check process will cost 1.75% of the check's face value plus 30¢ per transaction. There is no monthly fee but $10 monthly minimum does apply.
Strengths
Although Authorize.Net resellers can charge virtually any price they wish, pricing for this provider's gateways and services remain relatively low. This is due to two factors:
- Low buy rates: Authorize.Net has excellent buy rates from which resellers can mark up their services both competitively and profitably.
- Competition: So many companies resell Authorize.Net's services that pricing needs to remain low: reseller competition is fierce!
The features Authorize.Net offers (recurring billing, fraud detection, and eCheck) meet the needs of virtually every merchant. Such a comprehensive offering eliminates the need to implement third party solutions, and makes managing the services easy.
Authorize.Net does not consider one form of integration superior to another, so it offers customers both. New Webmasters will find this feature particularly attractive, as they may not yet have the programming skills to implement the Authorize.Net gateway through its available API, but want to have the option to do so in the future, once they acquire those skills.
Authorize.Net's popularity is of benefit to many of its users. If you look at the features offered by most of the currently available shopping carts, almost every one offers built-in support for Authorize.Net right out of the box. In fact, many shopping cart and ecommerce solutions list support for Authorize.Net among the software's features. In these cases, unless you're writing a custom shopping cart for your site, you don't have to worry about integrating your Authorize.Net gateway: it's already been done for you. If you've chosen to write your own custom shopping cart, you'll find that developers have released the source code that accesses Authorize.Net's AIM API, making application development much quicker and easier.
Weaknesses
As popular as Authorize.Net's services are, they are not perfect. Being the largest payment gateway provider does have its downsides.
The first notable issue is that pricing can vary tremendously from one reseller to another. If your goal is to get the lowest rates possible, you'll need to shop around quite a bit. Unfortunately, you may also be inundated with merchant account offers, as the vast majority of resellers are very interested in landing lucrative merchant accounts. Some will even refuse to establish a gateway for you unless you use their merchant services.
As the largest payment gateway provider, Authorize.Net is often targeted by hackers. In September 2004, Authorize.Net was the target of a Distributed Denial of Service attack (DDoS) that lasted for almost a full week, preventing some merchants from processing sales, and others from being able to sign up for new services. It wasn't the first attack Authorize.Net has experienced, and it's not likely to be the last. Granted, any business could have been targeted (in fact, 2checkout.com was attacked at the same time), but it's fair to say that being number one in the payment gateway industry also means being number one on the hackers' hit list.
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