Payment Gateway Provider
Contrary to popular belief, Authorize.net is not primarily 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.
Acquisition and Location
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 Review Table of Contents
- Sales & Marketing: Authorize.net is partnered with a large number of resellers and has received some complaints about its sales practices.
- Costs & Contract: Authorize.net offers variable contract terms that depend on the reseller’s pricing for its payment gateway.
- Complaints & Service: Authorize.net has received more than 100 public complaints.
- BBB Rating: Authorize.net has an “A+” rating with the Better Business Bureau and has received 112 complaints in the past three years.
- Rates & Fees: How Merchants Got The Best Rates With Authorize.net
Products & Services Offered
- 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)
Types of Businesses Served
Authorize.net Rates, Fees, and Costs
|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 absolutely no setup fee, a $25 monthly gateway fee, and a 2.9% plus $0.30 per-transaction fee. These are the company’s fees for merchants who sign up for payment processing directly through Authorize.net. However, pricing will likely differ from these figures for most merchants 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. Authorize.net’s rates, while transparent, are not competitive with those of the cheapest merchant accounts.
Be Mindful of Varying Contract Terms
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.
Authorize.net Complaints & Customer Reviews
|Total Online Complaints||100+|
|Live Customer Support||Yes|
|Most Common Complaint||Poor Service|
Numerous Support Options
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, which is available 24/7. It makes some mention of online chat support, but merchants must login to use this service. Authorize.net’s many support options are worth comparing to the top-rated merchant account providers for customer service.
Resellers are the Issue
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. While some Authorize.net complaints claim the company is a scam operation, it is 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.
Authorize.net BBB Rating Summary
Key Points - BBB
|Product & Service Complaints||44|
|Billing & Collection Complaints||64|
|Advertising & Sales Complaints||3|
|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.
Moderate Complaint Total
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 112 complaints filed within the last 36 months and 22 complaints closed within the last year. Of the complaints, 64 are due to billing and collection issues, 44 are regarding problems with products and services, three have to do with with advertising and sales issues, and one is related to a delivery issue. Thirty complaints were resolved to the merchant’s satisfaction, while the remaining 82 either were resolved to the dissatisfaction of the merchant or did not receive a final response from the merchant.
What Merchants Say
One complaint mentions continued withdrawals after account cancellation:
I cancelled my account with Authorize.net on November 5th, 2016, and then again on January 6th, 2016 when I saw they were continuing to withdraw funds from our business bank account. They have continued to sneak debit withdraws from our account for the past 2 years. My bank has contacted them, and I have personally tried to contact them with no response. This is a HUGE fraud case.
Authorize.net’s response to the complainant explains that continued withdrawals may come from the customer’s chosen merchant account provider since discontinuing service with Authorize.net does not automatically cancel the account with a separate company (EVO Payments, in this case):
I would like to thank you for contacting Authorize.Net through the Better Business Bureau. I will do everything I can to resolve your concern in a manner that benefits all parties involved. I have located gateway ******* under business name “***** ***** ***” and I will be responding to your complaint from this account. If this is not the correct account, then please let me know the correct gateway ID for reference.
Our records indicate that the last time Authorize.Net billed you for this account was on January 6, 2016; this is also the same day the account was closed in Authorize.Net’s system. This closure ceased all billing related to this account. Upon searching your name and business name, I was not able to locate any other accounts with Authorize.Net. If you believe that you have another account, please reply with that Gateway ID, so we can further research this. When you signed up with Authorize.Net, you also signed up for a merchant account in addition to the Authorize.Net account.
I understand you have been billed continually for the last two years; this billing may be from your Merchant Service Provider (MSP) if your account is still in an open status with them. Our records indicate that your MSP may be EVO Payments (formally PowerPay and/or eOnlineData). They can be reached at 888-888-4009 for additional assistance.
I hope I have pointed you in the right direction for billing and have addressed this issue for you. Thank you for contacting us and have a great day!
Merchants who find themselves in this situation may benefit from taking the proper steps to cancel their merchant account without paying a fee.
A “B” Performance Overall
The moderate complaint rate is mitigated somewhat by the company’s large size and positive trend, resulting in a CPO-adjusted rating of “B.”
Truth In Marketing & Advertising
|Employs Independent Resellers||Yes|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||Yes|
Clear Pricing Breakdown
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. As explained on their website, the Authorize.net payment gateway does not have a contract itself or early termination fees.
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.” However, if you suspect that Authorize.net is charging you undisclosed fees, we recommend seeking a third-party statement audit to eliminate hidden costs.
Authorize.net Marketing Example
About Phillip Parker
Phillip Parker is a former merchant services sales agent who believes the industry has been overrun by people who engage in fraud and deception in order to steal from hard working business owners. He created this website to help you avoid the bad players, save money on fees, and to get peace of mind with your merchant account. If you would like to help support his work, learn more about our cost reduction service. We can evaluate your statement, tell you exactly how much you're overpaying, and then help you dramatically reduce your fees with your current credit card processor. Looking to switch instead? See our list of the best merchant account providers.Schedule a Consultation with Phillip