Authorize.Net Payment Gateway and Merchant Account

UniBul Merchant Services offers payment acceptance solutions mostly to e-commerce and MO / TO merchants and we are fielding a never-ending stream of inquiries about payment gateways and virtual terminals. There is little doubt that our free Authorize.Net merchant account is a substantial reason why there is so much interest. One thing we learn from these inquiries is that there often is a great deal of misunderstanding about the role a payment gateway plays in the credit card processing cycle. I will try to shed some light on the subject with this post.

Authorize.Net Payment Gateway Essentials

Think of a payment gateway as a service for collecting and transmitting information, which is exactly what a point of sale (POS) credit card processing machine does. Authorize.Net provides the link between your e-commerce website and the processing bank that set up your credit card acceptance service.

Of course there are differences between the functions performed by a POS terminal and a payment gateway and the most prominent one is that the former gathers the payment data directly from the customer's card by "reading" the card's mag-stripe. Authorize.Net, by contrast, collects the data that the customer has key-entered into the checkout's payment form. Still, this is a quite minor technical detail.

Once the transaction data is collected, both the payment gateway and the POS machine encrypt it before transmittal to the processor for protection against hackers. The processing bank communicates the transaction data with the card issuing bank, which approves or declines the transaction and sends its response back to the website through the same channel.

Authorize.Net Payment Gateway Cost

There are variations from one vendor to another, but the pricing should be within a certain range. Authorize.Net usually costs about $20 per month, although it could be as little as $10 or less. There could also be a set-up fee of up to $100 and there will certainly be an authorization fee, typically of $0.10 per transaction (which incidentally is how Authorize.Net makes its money).

One very important thing you need to understand is that the Authorize.Net fees are completely independent from the merchant account fees. So when evaluating pricing proposals, you must scrutinize the whole package, including the merchant account fees. Don't be misled by incredibly low headline rates. You know what they say, if it looks too good to be true, it probably is. Authorize.Net, as well as all other payment gateways and merchant accounts are certainly no exception to this rule.

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