February 16, 2023

Payment Processing

What is Authorize.net?

Payment Processing

In today's rapidly expanding online marketplace, one of the most important decisions a business owner will ever make is how to streamline and secure the payment transaction process. Especially if your margins are tight, it's critical to keep your cash flowing back into your business. Authorize.net helps simplify accepting electronic and credit card payments in a retail storefront, online, or over the phone. Get solutions that go to work for your customers and your business, then you can put all your attention back into what you do best.  Successful payment processing can be a huge part of your business, but it doesn't have to take an inordinate amount of your time. Authorize.net makes the purchase process a stress-free part of running a business, with easy ways to streamline payment processing that can help optimize your cash flow.  Authorize.net has been working with merchants and small businesses since 1996. It has truly set the standard for gateway service providers all over the world. Their award-winning service allows merchants to accept credit cards, eChecks, and other forms of digital payments through their website. (Authorize.net is now a wholly-owned subsidiary of Visa. Their services are sold through a network of reseller partners, merchant service providers and, financial institutions.)

More Than 400,000 Customers Can't be Wrong!

Authorize.net handles billions of transactions for its over 400,000 customers every year. In today's rapidly expanding online marketplace, one of the most important decisions a business owner will ever make is how to create a simple and secure payment transaction process.  Many merchant account providers trust Authorize.net too and even include an Authorize.net Emulator Mode so their gateway interface is compatible with the most common and recognizable gateway product in the industry.

How Does a Typical Transaction Work?

A customer selects a product or service, then enters their credit card information into an application. What happens next is an extraordinarily complex data exchange that takes about three seconds to complete! To simplify here are the three critical, and completely invisible, steps to completing a secure payment process:  1. Authorization: A customer uses their preferred payment method: credit/debit card, eCheck, or another digital option, to make a purchase. The process of checking that the customer is who they say they are and that they have sufficient funds to complete the purchase is called authorization.  2. Capture: After verifying that the customer has adequate funds to complete the purchase, the customer's banking institution then places a hold on those funds.  3. Settlement: The process of sending funds from the customer's bank account to the merchant bank account is called settlement. A payment network then handles the settlement and funds are deposited into a businesses's checking account within two business days.

What is a Gateway?

The payment gateway is the technology that safely captures and conducts this complicated payment data exchange from the customer to all the entities involved in processing the payment. Within seconds the merchant and buyer receive authorization or decline of the payment method. A payment gateway validates the customer's card details securely, ensures that the necessary funds are available, and eventually facilitates the final payment to the merchant. A gateway acts as a secure interface between an online merchant and the customer. It does so by encrypting sensitive credit card information, then securely passing that data from the customer to the acquiring bank, via the merchant.  The payment gateway works as an intermediary between your customer and the merchant. It ensures every transaction is carried out securely and within seconds. A trusted online payment gateway can simplify how merchants integrate the necessary software that delivers smooth transactions every time. During payment processing, the gateway protects all sensitive customer data exchanged between the acquirer and the merchant.

Why You Need a Payment Gateway:

You may be still be asking yourself why you need a payment gateway at this point. Online payment is processed as a card-not-present transaction. That means that a customer's credit or debit card will not be physically swiped on a POS terminal, in front of a salesperson, like in a brick-and-mortar shop. With a 'card-not-present transaction you only have the information that the buyer is entering on the payment page. How can you be sure that the card the customer is entering belongs to them? Does it belong to a family member who has not authorized the purchase? Is it stolen? In card-not-present transactions, the risk of fraud is significantly higher, exposing your business to significant loss of revenue.  Without a payment gateway, cybercriminals have easier access to legitimate card data that you process, exposing your business to data breaches, fraud, and chargebacks. A data breach can cause irreparable harm to your brand and your bottom line.  In a typical online transaction, a payment gateway relays information from merchant to acquirer, to the issuing bank. By using data encryption, a gateway safeguards your customer's payment data. In addition to fraud protection, a trusted payment gateway protects merchants from expired cards, insufficient funds, closed accounts, and exceeding a customer's credit limits.

Do I Need Both a Payment Gateway and a Payment Processor?

Brick-and-mortar shops don't require the use of a payment gateway if they only intend to accept credit and debit card payments at a point-of-sale terminal. These in-person payments are easy to verify by simply asking the customer to provide a photo ID. Merchants accepting online credit cards, debit cards, eChecks, Apple Pay, and other forms of digital payments need both a payment processor and a payment gateway to ensure secure online payments.

Authorize.net Features:

  • Advanced Fraud Protection

Authorize.net is known for its best-in-class fraud prevention system, the Advanced Fraud Detection Suite‚Ñ¢ (AFDS). A surprising number of small and medium-sized business owners think they can fly under the radar of fraudsters. However, many eCommerce analysts project small and medium-sized businesses will lose billions of dollars each year due to fraud. With AFDS, a client can customize a variety of fraud detection filters and tools. These tools provide a thorough screening of each transaction by validating credit card details before processing. Business owners and managers will also have the ability to block IP addresses from regions and countries where fraud is known to be prevalent.  AFDS also provides detailed reports to keep businesses aware of any transactions that look suspicious. The tool offers the option to implement Velocity Filters which limit the volume of transactions processed per hour. That helps reduce the chance of incurring high volume fraud. Hackers will typically try to quickly push through a large number of transactions using stolen credit card data.

  • Customer Information Manager

Streamline the checkout process for returning customers by allowing them to securely save billing, payment, and shipping information. Their profiles can include multiple payment methods and one or more shipping locations so your buyer doesn’t have to enter the information manually every time. The Customer Information Manager, or CIM, stores sensitive payment information on secure servers, simplifying compliance with payment card industry standards (PCI DSS). Authorize.net makes it easy for you to manage customer profiles and issue transactions manually from within the merchant Interface or an Application Programming Interface (API).

  • Payment types

Authorize.net gives your customers the option to select the payment option that they prefer. It Makes it easy for them to pay by accepting Apple Pay, PayPal, major credit cards, debit cards, eChecks, and more.

  • Recurring payments

Authorize.net handles automated billing for repeat customers and subscription-based purchases. Give your staff a break. Their recurring billing tools make billing efficient, secure and eliminate the hassle of manually re-entering billing or payment transaction details. 

  • Accounting updater

Automatic monthly credit card updates keep card information current to avoid payment interruptions and lost sales. Authorize.net does the work to update card data in your Customer Information Manager (CIM) profiles and Automated Recurring Billing™ (ARB) subscriptions, ensuring that your customers experience a seamless payments process. 

  • Invoicing

It also uses its CIM to update credit card data in customer profiles and ARB subscriptions, ensuring your customers’ payment process is seamless.

Authorize.net Pricing:

This gateway offers stand-alone pricing for their Payment Gateway Only account. They also have a monthly package that includes a merchant account for customers, with no setup fee. This option charges 10 cents per transaction and 10 cents per batch transaction. The All-in-One Account option charges 2.9% plus 30 cents per transaction and includes a merchant account that Authorize.net provides. One drawback going directly with Authorize.net is they charge a $25 monthly gateway service fee. This applies regardless of whether you choose their All-in-One Accountor their Payment Gateway Only account.

Authorize.net + Treati.io:

With Treati, business owners and managers receive an Interchange Plus Pricing Model that is fiercely competitive compared to other payment processing industry methods. Combining our payment processing services with the benefits of an Authorize.net gateway, merchants get the best of both worlds.  

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