Stripe vs Authorize Net

Nowadays, anyone can run an online business. However, before you jump in, don’t forget that you also need a payment gateway in order to process and receive your payments. In the article below, we will help you choose between two popular payment gateways, Stripe vs Authorize Net. We will compare their ease of use, features, and pricing so that you can determine which one is the best for your business.

Stripe Overview
Many people believe that Stripe is currently the most developer-friendly payment gateway available. The company behind Stripe is based in San Francisco, and they have nine operating global offices. Stripe claims to be the best platform for running an online business, and it has become a major competitor to PayPal (see our previous post: Stripe vs PayPal).

So, why is Stripe is so popular? One of the primary reasons is because it allows you to receive online payments without any monthly fee. In addition, you may need to note that Stripe is targeted to developers. It is highly customizable, but only if handled by someone with programming knowledge.

If you know what you are doing, or if you don’t mind hiring a professional developer, Stripe can be a very powerful payment gateway. Well, there are plug-ins available for users who don’t want to code, but these plug-ins are very simple.

Stripe has a secure operation mechanism, and it has an effective anti-fraud team to deal with dubious transactions. It supports both one-time and recurring transactions, and it supports more than 100 currencies. It can automatically convert international payments into your default currency. It accepts all major credit cards, Bitcoin, Android Pay, Apple Pay, AliPay, Checkout, and AmEx Express.

How Stripe Works
There are some differences in the workflows and workings of Stripe vs Authorize Net. These differences may be very important for some businesses. Now, let’s see first how Stripe works.

You can deploy an application on the customer’s side to collect payment information in a transaction, such as the credit card number and expiration date. The payment information is then sent directly to Stripe’s backend through a form by calling the API. You don’t need to handle such sensitive information in your web server; this is a nice advantage if you don’t want to deal with complex security measures. After the transaction is verified, Stripe will send a token to the app, which will continue the token to your web server to complete the transaction. Once the charging process is completed, the web server has to send the token back to Stripe. Finally, Stripe will send a response to the web server with the transaction result, and the web server can continue the response to the app.

Stripe Pricing
When choosing between Stripe vs Authorize Net, pricing may become one significant factor that affects your decision. We have mentioned briefly above that Stripe has no monthly fee. This is a big advantage for a new business or startup who doesn’t want to spend too much money while still building customers. This allows you to focus on developing your products and services without worrying about expenses.

The fee on Stripe is 2.9% + $0.30 per successful charge. There are no hidden costs. You can install Stripe for free, and there are no charges for validation, refund, and failed payment processes. You don’t need a merchant account in order to use Stripe and receive your money. Note that Stripe has a 2-day rolling basis to transfer the money to your bank account, but it sometimes takes 2 – 7 days to receive the money.

Authorize Net Overview
Authorize Net is also a leading payment gateway which allows businesses to accept payments via credit cards and electronic checks. As a matter of fact, Authorize Net has been offering payment processing services since 1996, and it is now widely considered as one of the industry’s standards with hundreds of thousands merchant customers.

In order to use Authorize Net, you need to have a merchant bank account. This is one significant difference between Stripe vs Authorize Net. The payment gateway is designed to automatically deposit payments to merchant bank account. Also, Authorize Net does accept international transactions, but it only serves businesses based in the United States, Canada, Europe, United Kingdom, and Australia. It accepts all major credit cards, PayPal, Checkout, Apple Pay, and optional electronic checks.

There are optional features available on Authorize Net. Some are included in the monthly subscription plan, and some others have additional fees. The included features in the monthly subscription plan are recurring billing, advanced fraud detection, customer information manager, invoicing, and syncing with QuickBooks for easy business accounting. The separate features are the account updater and electronic check payment method.

How Authorize Net Works
Authorize Net has a relatively longer and more complicated process. Don’t worry, you don’t need to deal with most part of the process. But it is still important to understand how the payment gateway works.

First of all, the customer provides their credit card information to make a transaction. Authorize Net takes this information on behalf of the merchant. The information is sent through a secure connection to the processor, which submits the transaction to the credit card network. From here, the transaction is routed to the bank of the customer’s credit card. Once the transaction is processed, the outcome is relayed to the processor and then to Authorize Net.

Authorize Net sends the transaction information to the merchant, who is supposed to provide the products or services bought by the customer. Finally, the customer’s bank sends the funds to the credit card network to be routed to the merchant’s bank account. It usually takes 1 – 7 days for the funds to appear in the merchant’s bank account.

Authorize Net Pricing
Authorize Net has multiple fees. First of all, it charges $49 for setup and installation. It also has a monthly subscription fee which is as much as $25 per month. In addition, there is the usual 2.9% + $0.30 processing fee per transaction.

On the good side, the subscription already includes the recurring billing, advanced fraud detection, customer information manager, invoicing, and syncing with QuickBooks. Some users don’t mind spending more money for these special features.

There is also eCheck.Net, a fully integrated electronic check payment method. This feature is available with an additional 0.75% fee per transaction.

StripeAuthorize Net
- No monthly or additional fees, just a standard transaction fee- Has setup and monthly fees, additional fees for some features, and a transaction fee
- May take 2 – 7 days to receive the money- May take 1 – 7 days to receive the money
- Doesn’t need a merchant account, suitable for all businesses worldwide- Requires a merchant account, only serves businesses in United States, Canada, Europe, United Kingdom, and Australia
- Highly customizable, powerful API- Monthly subscription comes with advanced ready-to-use features
- Accepts major credit cards, Bitcoin, Android Pay, Apple Pay, AliPay, Checkout, and AmEx Express- Accepts major credit cards, PayPal, Checkout, Apple Pay, and optional electronic checks

Conclusion
If you don’t want to pay additional fees for setup, monthly subscription, or advanced features that you don’t need, Stripe makes the way to go. Stripe offers the best efficiency because it only has a transaction processing fee. Stripe is especially great if you prefer a highly customizable payment gateway. On the other hand, Authorize Net should be your choice if you need electronic check payment method. Authorize Net is good if you don’t mind taking a monthly subscription for a suite of ready-to-use features.

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