Contrary to popular belief, Authorize.net is not a merchant account provider or a credit card processor. Instead, Authorize.net is what is known in the merchant services industry as a “payment gateway provider.” This means that the company provides software and applications that route credit card payments from the point of sale to the actual credit card processor. Payment gateway providers like Authorize.net are an additional but necessary service if a merchant wishes to use a virtual terminal, website shopping cart, or some mobile processing applications. In recent years, Authorize.net has added its own mobile phone processing app and virtual terminal to its stable of products. Authorize.net was founded in 1996 and acquired by CyberSource in 2007, and then both CyberSource and Authorize.net were acquired by Visa in 2010. Michael Walsh is the CEO of CyberSource, which is headquartered in San Francisco, California.
Authorize.net Products and Services
- Debit and credit card processing
- Online payment gateway
- Virtual terminal with USB card swiper
- Hosted shopping cart
- Buy Now buttons
- Broad third-party integration (including QuickBooks)
Sales & Marketing
Key Points - Sales & Marketing
|Employs Independent Resellers||Yes|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||Yes|
Authorize.net’s website provides the suggested retail price of its services, and it clearly states that resellers may alter the costs as they see fit. The company’s pricing breakdown is complete with explanations of each term and is easy to access from the main page. Because Authorize.net’s services are resold by a huge number of merchants, the figures provided on its actual site are subject to change, but the company is being helpful by offering a suggested cost for merchants to use in potential negotiations and is therefore awarded an “A.”
Authorize.net Marketing Example
Costs & Contract
Key Points - Costs & Contract
|Swiped Rate||2.9% + $0.30|
|Keyed-in Rate||2.9% + $0.30|
|Early Termination Fee||None|
|PCI Compliance Fee||None|
|Equipment Lease Terms||Variable|
Authorize.net quotes pricing on its website of a $49 setup fee, a $25 monthly gateway fee, and a 2.9% plus $0.30 per-transaction fee. However, pricing may vary based on the reseller because resellers can set prices as they please. Due to this, pricing is very negotiable and many of the fees can be greatly reduced or eliminated. Many of the complaints filed publicly against the company (some of which are in the comments section below) report confusion over the the fact that a third-party reseller was actually offering the services of Authorize.net even though the merchant was under the impression that the reseller itself had built a proprietary payment gateway. While these problems are unrelated to the actual Authorize.net contract, it is worth noting that contract terms can vary, and resellers are not obligated to disclose which figures they have altered from the original suggested retail price. See the Authorize.Net Merchant Agreement.
Complaints & Service
Key Points - Complaints & Service
|Total Online Complaints||100+|
|Live Customer Support||Yes|
|Most Common Complaint||Poor Service|
Authorize.net offers an FAQ/troubleshooting-type customer support page on its website, and it also lists an email address and an 877- number for merchant support. It makes some mention of online chat support, but merchants must login to use this service.
The company has received a few dozen complaints on consumer protection websites like Ripoff Report, with most of these complaints due to poor customer service, feature malfunctions, fund holds, billing disputes, or unexpected charges. It is also apparent that several merchants were confused about the fact that Authorize.net was not the same company as their credit card processor. These complainants were unsure which company was to blame for the problems they were having. This confusion can usually be traced back to resellers who did a poor job of explaining the relationship between the credit card processor and the Authorize.net payment gateway.
Key Points - BBB
|Product & Service Complaints||51|
|Billing & Collection Complaints||80|
|Advertising & Sales Complaints||9|
|Guarantee & Warranty Complaints||0|
Note: We have adjusted this company’s BBB rating according to our own standards. To better understand why we adjust BBB ratings, please see our Rating Criteria.
Authorize.net has a low-to-moderate amount of BBB complaints for its size and time in business. As of this review, the Better Business Bureau is giving Authorize.net a rating of “A+” despite the company having 141 complaints filed within the last 36 months, which is slightly down from 172 complaints as of the last update of this review. Of the complaints, 80 are due to billing and collection issues, 51 are regarding problems with products and services, 9 have to do with with advertising and sales issues, and one is related to a delivery issue. Forty-five complaints were resolved to the merchant’s satisfaction, while the remaining 96 either were resolved to the dissatisfaction of the merchant or did not receive a final response from the merchant. The moderate complaint rate is mitigated somewhat by the company’s large size and positive trend, resulting in a CPO-adjusted rating of “B.”
About Phillip Parker
Phillip Parker is a former merchant services agent turned small business advocate and the author of "Fee Sweep," which teaches merchants how to dramatically lower their processing rates, eliminate junk fees, and avoid fine-print scams. He founded CardPaymentOptions.com to help merchants enact positive change in the credit card processing industry. Schedule a Consultation with PhillipSchedule a Consultation with Phillip
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