Everything you need to start accepting payments

A merchant account is a financial institution or bank account used by a merchant specifically for the purpose of collecting proceeds from a consumer bank account or credit card payment transactions.

A payment gateway is the infrastructure that enables you to accept credit cards and electronic check payments from websites, terminals or mobile devices. Payment gateways also provide merchants with transaction management, reporting, and billing services.

You can use a Card Present (CP) merchant account to receive payments at a physical location where customers physically present a form of payment to you at the time of the transaction.

By contrast, a Card Not Present (CNP) merchant account can be used to receive payments electronically (i.e., online payments), or in situations where consumers aren’t physically present at the time of the transaction.

No. A merchant account is a type of bank account that allows businesses to accept payments by payment cards, which are typically debit or credit cards. It’s similar to a credit line for your business to accept payments or issue refunds.

A merchant account is unique to you and your business. When you apply, the underwriter will look at your industry, your processing history (if any), your personal credit, your business’ creditworthiness, and other factors. Once approved, your business can start accepting payments.

We offer a variety of payment options ranging from credit cards and digital eChecks to PayPal.

There are no additional fees beyond the prices noted above. The plan prices automatically include the plan features with the exception of Account Updater and eCheck payments. Account Updater may incur additional costs, and the eCheck plan comes with additional services.

The Authorize.net payment gateway does not have a contract or early termination fees.

PayPal is not a merchant account. It’s a third-party processor, and it aggregates all of its sellers’ accounts into one large merchant account. Because you are not the sole owner of this account, it cannot be used with the Authorize.net gateway.

Winner: Authorize.net

Authorize.net is the superior choice for businesses focused on minimizing transaction costs and maximizing profit margins. While PayPal markets itself as "free to start," its higher per-transaction fees can quickly become a large expense. Authorize.net offers a lower cost per sale and a structure that saves significant money as you scale.

Here is why Authorize.net is the lower-fee option:

1. Significantly lower transaction rates 

Every time you make a sale, you keep more money with Authorize.net.

• Authorize.net: Charges 2.9% + $0.30 per transaction (All-in-One plan).
• PayPal: Charges 2.99% + $0.49 for standard card payments and 3.49% + $0.49 for PayPal Checkout transactions.

The Impact: On a $100 sale using PayPal Checkout, you pay roughly $3.98 in fees. On Authorize.net, you pay only $3.20. Over hundreds of transactions, this difference adds up to thousands of dollars in lost revenue with PayPal.
 

2. Flexibility to lower rates further (Gateway Only) 

The true power of Authorize.net lies in its "Gateway Only" option. Unlike PayPal, which locks you into their flat rate, Authorize.net allows you to connect to any merchant account provider.

• This enables you to negotiate Interchange-Plus pricing, where you can often secure effective rates closer to 2.2% - 2.5%.
• PayPal does not offer this flexibility; you pay their retail rates regardless of your volume.
   

3. Lower fixed fees 

Authorize.net charges a fixed fee of $0.30 per transaction, whereas PayPal charges $0.49. If you process smaller transactions (e.g., $15–$30 items), PayPal’s higher fixed fee eats a large percentage of your profit. Authorize.net is far more economical for high-volume, low-ticket merchants.
 

4. The monthly fee pays for itself

Because the transaction fees are lower than PayPal's, the savings cover the monthly fee very quickly. Once you process roughly $2,500–$3,000 in sales per month, the savings from Authorize.net’s lower rates exceed the cost of the subscription, making it the cheaper option overall.

Small and mid‑sized businesses often achieve the lowest overall costs by using payment methods that minimize percentage-based fees. ACH (eCheck) payments are typically the most economical option for online transactions, especially for B2B invoices or high‑ticket payments, because they avoid the interchange fees associated with credit cards.

Businesses that accept online payments encounter several categories of fees in addition to the base transaction rate:
 

• Percentage‑based fees, applied to each transaction according to the card type used.
• Fixed per‑transaction fees, added to every authorization regardless of amount.
• Monthly service or gateway fees, used for payment gateway access and account maintenance.
• Chargeback handling fees, applied when customers dispute transactions.
• Batch or settlement fees, charged when daily transactions are submitted for funding.
• Cross‑border or international surcharges, added when accepting cards issued outside the business’s home country.
• PCI compliance fees, depending on the provider’s security program.

Together, these fees shape the total cost of payment acceptance and influence which pricing model is most appropriate for the business’s size, transaction volume, and industry.

Upon proper completion of the application, your Authorize.net Payment Gateway account is approved automatically. However, in order to accept credit cards, you must have a merchant account, and approval for that account can be immediate or take from one to five business days or more depending on several factors, including industry, credit history and responsiveness.

If you have an existing merchant account, you can update your gateway with the parameters provided from your merchant provider and be ready to transact within minutes.

If you are applying for our "all-in-one" solution where we help to provide you with the merchant account, the approval process could be as quick as one hour if the application is "auto-approved".

The Merchant Service Provider (MSP) facilitates transferring funds to your bank account. Funding time can vary depending on your MSP. The industry average funding period is between three to five business days.

No, the Authorize.net payment gateway does not have a contract fee for early termination.

Once a day, Authorize.net takes all your transactions from the previous 24 hours and aggregates them into a “batch” which is then sent off to the processing networks. The Daily Batch Fee is the fee assessed for this process.

A chargeback is a charge reversal initiated by the cardholder’s bank on behalf of the cardholder.

Payment methods can be compared by evaluating both their cost structure and the amount of time required for funds to reach a business bank account. The most accurate comparison uses the effective rate, which is calculated by dividing total monthly fees by total processing volume. This method reveals the true cost of a provider, including percentage-based fees, fixed per‑transaction fees, and any monthly or gateway charges.

Processing speed is compared by reviewing each provider’s settlement timeline, which refers to the number of business days it takes for cleared funds to be deposited. Traditional merchant account providers often support next‑day or two‑day funding, while payment aggregators may take longer unless merchants pay additional fees for expedited transfers.

ACH payments (eChecks) typically involve low-percentage fees because they move funds directly between bank accounts rather than through the card networks. With Authorize.net, ACH processing follows a straightforward pricing structure designed to reduce costs for businesses handling recurring invoices, large payments, or B2B transactions.
 

Authorize.net gateway:

• Monthly gateway fee: $25
  This supports secure transaction routing, reporting tools, and the combined ability to process both credit cards and eChecks from a single platform.

• Sign‑up fee: $0
  There is no initial cost to enable ACH/eCheck acceptance.

• eCheck transaction fee: 0.75%
  This low, percentage‑based fee applies to each ACH transaction. Because no fixed per‑transaction fee is charged, eCheck payments maintain predictable pricing even for small ticket sizes.

• Optional credit card fees:
  For businesses accepting credit cards alongside ACH, Authorize.net charges:

  • $0.10 per credit card transaction
  • $0.10 daily batch fee
     

Compared to card payments, the 0.75% eCheck rate is cheaper, especially for higher‑value payments where percentage‑based savings accumulate quickly. This structure makes ACH one of the most cost‑effective online payment options available to SMBs.

Yes. ACH payments are considered highly secure for online businesses. They use bank‑level encryption, strict identity checks, and fraud‑monitoring requirements set by Nacha, the governing body of the ACH network. While no payment method is completely immune to fraud, ACH transactions include multiple layers of protection that significantly reduce risk when businesses follow recommended security practices.
 

Why ACH payments are secure
 

1. Bank‑level encryption
   ACH transactions use strong encryption and authentication protocols to protect account data during transmission and storage.
2. Nacha security requirements
   All participants in the ACH network must follow Nacha’s rules for data protection, validation, and secure processing. These rules are mandatory and updated regularly.
3. Tokenization of bank details
   Many payment platforms replace sensitive bank information with secure tokens. This reduces exposure of actual account numbers and lowers the risk of data theft.
4. Federal legal protections
   ACH payments fall under the Electronic Fund Transfer Act (EFTA), which provides consumers with protection against unauthorized withdrawals and outlines processes for dispute resolution.

Yes. Several payment methods are typically cheaper than credit cards because they avoid high interchange fees. The most cost‑effective options include ACH bank transfers (pay‑by‑bank), cash, debit cards, and sometimes mobile wallet payments when they run on lower‑cost debit or ACH rails.
 

Cheaper payment methods and why they cost less
 

1. ACH / Bank Transfers (Pay‑by‑Bank)

• What it is: Money moves directly between bank accounts through the ACH network.
• Why it's cheaper: No card network involvement, so merchants pay much lower fees—often a small percentage or flat fee.
• Best for: Large invoices, recurring payments, subscriptions, and B2B transactions.

2. Cash

• What it is: Physical payment with no processor involved.
• Why it's cheaper: Merchants pay zero processing fees, and some offer cash discounts (often 2–4%).
• Best for: In‑person purchases where fee avoidance matters.

3. Debit Cards

• What it is: Funds come directly from the customer’s bank account.
• Why it's cheaper: Debit interchange fees are lower than credit card fees, reducing merchant costs.
• Best for: Everyday consumer spending without accruing debt.

4. Mobile Wallets (Apple Pay, Google Pay)

• What it is: Payments made through a smartphone using stored card or bank details.
• Why it can be cheaper: Transactions that run over debit or ACH rails have lower fees, and strong security can reduce fraud‑related costs.
• Best for: Fast, secure checkout in stores and online.

Online payment solutions improve small business cash flow by helping you get paid faster, reducing manual work, lowering operational costs, and giving you real‑time visibility into your finances. They also help increase sales by offering customers convenient ways to pay.
 

Key cash flow benefits
 

1. Faster access to funds
   Digital payments clear much faster than checks, allowing revenue to reach your bank account sooner and improving liquidity.
2. Better forecasting and financial control
   Real‑time dashboards and reporting tools show incoming payments, trends, and outstanding balances, helping you plan cash flow more accurately.
3. Lower operational costs
   Accepting online payments reduces the labor, errors, and administrative expenses associated with handling cash or paper checks.
4. Automated reconciliation
   Online payment systems sync with accounting software, automatically recording transactions and saving time on manual bookkeeping.
5. Increased sales and customer convenience
   Offering cards, mobile wallets, and online checkout reduces friction, helps prevent abandoned sales, and can attract more customers.
6. Improved vendor and supplier payments
   Digital payouts make it easier to pay vendors on time and may help you qualify for early‑payment discounts or better terms.
    

How online payments improve cash flow
 

• Speed: Funds move quickly from customer to business through secure digital rails.
• Automation: Gateways connect directly to your bank and accounting system, reducing manual effort.
• Data insights: You get clear, real‑time visibility into transactions, inventory impact, and spending.
• Convenience: Customers can pay the way they prefer, leading to more completed sales.

Fraud solutions help small and mid‑sized businesses reduce costs by preventing financial losses, lowering chargeback fees, reducing operational workload, and avoiding expenses related to data breaches or reputation damage. By blocking suspicious activity early and improving internal processes, SMBs save money and protect future revenue.
 

Key ways fraud solutions reduce costs
 

1. Prevent direct financial losses

• Lower chargebacks: Fraud‑detection tools identify and stop fraudulent transactions before they result in chargeback fees or lost revenue.
• Secure payments: Encryption and tokenization protect sensitive data, reducing the risk of stolen payment information.
• Fewer unauthorized transactions: Multi‑factor authentication (MFA) and controls like Positive Pay help block fraudulent ACH or check payments.

2. Lower operational and recovery expenses

• Less time spent on investigations: Automated detection reduces the need for employees to manually review suspicious activity.
• Reduced reliance on external experts: Effective safeguards decrease the need for costly legal, forensic, or IT recovery services after a fraud incident.
• Streamlined workflows: Preconfigured fraud rules and dashboards simplify monitoring and reduce administrative burden.

3. Mitigate long‑term and hidden costs

• Protect customer trust: Preventing fraud helps maintain a strong reputation and avoids the loss of future sales.
• Avoid data breach fines: Strong security reduces the chance of regulatory penalties tied to compromised customer data.

How SMBs commonly implement fraud controls
 

• Technology tools: AI‑based fraud detection, MFA, encryption, and secure payment systems.
• Internal controls: Dual approvals, segregation of duties, regular audits, and controlled access to financial systems.
• Employee training: Teaching staff to identify phishing attempts, invoice scams, and social engineering.
• Vendor verification: Confirming new vendor details or payment changes using a trusted phone number.
• Proactive monitoring: Reviewing dashboards and alerts to detect unusual financial activity quickly.

Payment processing can be made faster by using modern payment technologies, reducing friction at checkout, and improving the systems that move payment data. These steps help businesses complete transactions more quickly, increase approval rates, and reduce delays caused by manual processes or network slowdowns.
 

Ways to speed up payment processing
 

1. Optimize the checkout experience
 

• Enable contactless/NFC payments: Tap‑to‑pay speeds up in‑person transactions.
• Use faster EMV workflows: Updated EMV chip readers reduce chip‑processing time.
• Offer one‑click and guest checkout: Fewer steps mean faster online payments.
• Use autofill and saved payment methods: Tokenization allows quick repeat purchases.
• Support mobile wallets: Apple Pay and Google Pay provide fast, secure checkouts.
   

2. Improve technology and infrastructure
 

• Use advanced payment gateways: Smart routing and high‑speed processing reduce delays.
• Automate invoicing and reminders: Eliminates manual steps that slow payments.
• Integrate systems through APIs: Connecting CRM, ERP, and billing systems prevents data bottlenecks.
• Leverage AI and machine learning: Intelligent fraud screening reduces false declines and unnecessary reviews.
• Ensure strong network performance: Reliable, fast internet speeds up terminal and gateway communication.
   

3. Strengthen operational processes
 

• Reduce friction: Ask only for essential payment information to prevent slowdowns.
• Use automated fraud checks: Prevents legitimate transactions from getting flagged or held.
• Consolidate into a unified platform: Centralizing payments simplifies management and shortens processing time.
• Monitor key metrics: Track approval rates, settlement times, and declines to identify system bottlenecks.
   

Transaction monitoring systems include rule‑based tools that flag suspicious activity, AI and machine‑learning platforms that detect complex fraud patterns, and behavioral or network‑analytics systems that identify unusual customer behavior. These systems are widely used in banking, e‑commerce, fintech, and crypto to support fraud prevention, anti–money laundering (AML), and regulatory compliance.

Types of transaction monitoring systems
 

1. Rule‑based monitoring systems like the Authorize.net Advanced Fraud Detection Suite
 

• Use predefined rules such as “flag transactions over $10,000.”
• Detect known risks like structuring, high‑risk country transfers, or transactions involving sanctioned entities.
• Common in traditional banking and AML programs.

2. AI and machine‑learning monitoring platforms
 

• Learn patterns of normal behavior and detect anomalies in real time.
• Reduce false positives by distinguishing legitimate activity from suspicious activity.
• Examples include platforms like Feedzai or DataVisor.

3. Behavioral analytics systems
 

• Track customer spending habits over time.
• Flag unusual behavior such as sudden high‑value purchases, new geographic locations, or unexpected cash deposits.
• Useful for both fraud prevention and AML.

4. Network and graph analytics tools
 

• Map relationships between accounts, devices, and transactions.
• Identify hidden criminal networks and linked entities involved in fraud or money laundering.
• Used in complex investigations and enterprise‑level monitoring.