Authorize.net is a payment gateway that allows anyone to process transactions that occur online. They connect websites to the various payment processing networks that exist without the need for extensive resources. It makes it possible for someone to start an online business and accept various forms of payment by quickly installing the complex and secure structures that are needed to do so. It manages the routing of each transaction and provides merchants with an interface to manage their transactions.
PayPal offers a similar structure, allowing an online business to quickly add payment buttons to their website so that transactions can take place. Instead of connecting to payment processing networks, however, PayPal does its own payment processing. Businesses, once verified, can immediately access their funds by a debit MasterCard or transfers to their bank account.
Both platforms offer account statements, generate merchant reports, and provide transaction management services. Where they differ is at the heart of the Authorize.Net vs PayPal debate.
1. Setup Fees
Authorize.net charges consumers a $49 setup cost and a $25 monthly fee. This is in addition to any transaction fees that may be charged with each purchase. For consumers who want WooCommerce integration, another $79 fee will be charged. Once setup, it becomes possible to accept all major credit cards directly from a website. PayPal payments are also accepted. Transactions can sync with QuickBooks and advanced fraud detection products come with the subscription.
PayPal does not have any setup fees. There is a $30 monthly fee if you want the Payments Pro version of PayPal, but the standard option doesn’t have a monthly cost. The Standard version does redirect consumers to PayPal to complete a transaction, however, which Authorize.net does not require.
Using WooCommerce with PayPal Pro has the same $79 cost associated with it. This cost does not apply when using PayPal Standard.
Authorize.net is available in Europe, Australia, Canada, and the United States.
PayPal has global support in more than 200 countries. It supports 26 currencies as of May 2017. This makes it possible to send or receive payments over virtually any border. This availability is offered in Standard and Pro versions.
3. Transaction Fees
Authorize.Net offers a 2.9% + $0.30 per transaction fee, but partner merchant account fees can vary. The final cost of the transaction fees will be determined by the final setup that is determined by the consumer using this platform. Transactions which occur internationally are assessed an additional 1.5% on the transaction. Micro-transactions under $10 are charged at the same rate.
At Authorize.net, any chargebacks that occur to the merchant account will have a $25 fee billed to it. That is in addition to the amount of the transaction being deducted as well.
PayPal charges a flat 2.9% + $0.30 fee per transaction that is processed. For transactions that are $10 or less, the fee is 5% + $0.05. Virtual Terminal is available for those on the Pro plan and those transaction fees are 3.1% + $0.30 per transaction. International transactions have an additional cost, while discounts are available for NGOs or registered non-profit organizations.
At PayPal, a chargeback fee may apply to a transaction, along with the transaction fees, if it is not covered by the platform’s payment protection policies.
4. Funds Availability
Authorize.net uses the traditional batch processing for the credit card transactions which have taken place. This requires every transaction to be “settled” before funds access is allowed. The default batch settlement time with this platform is 3pm Pacific Time, but this daily time can be changed. Most transactions are settled on the same day.
PayPal offers funds within a few minutes of the transaction taking place. Some transactions offer instantaneous money access, especially if an invoice has been sent instead of a traditional credit card transaction. This makes it possible to immediately use the funds for other business purposes or transfer funds to a registered authorized account. Funds transfers can be the same business day, but may take up to 4 business days to complete.
In the Authorize.net vs PayPal debate, both platforms offer the opportunity to accept credit card payments in a timely fashion. The process and costs are what must be considered. A low-cost solution is PayPal Standard, but this process takes a consumer off your website to process the transaction. The costs of PayPal Pro and Authorize.net are essentially the same.
If you want to choose your own payment gateway, then Authorize.Net is a better solution. If you want an all-in-one platform that will let you immediately manage your funds, then PayPal is the better option.