Authorize.net is a payment processor that handles credit card transactions for online and in-person businesses
Authorize.net is a payment processing platform owned by Visa that lets businesses accept credit and debit card payments. It sits between your customer, their bank, and your bank — capturing the card information, checking that funds are available, and moving money into your account. You do not need to be a large company to use it; small online stores, service providers, and brick-and-mortar shops all use Authorize.net to process payments.
The service works with most types of businesses and integrates into shopping carts, point-of-sale systems, and invoicing software. Authorize.net charges a fee per transaction, typically a percentage of the sale plus a flat fee, though the exact rate depends on your business type and the volume you process.
Key Takeaways
- Authorize.net processes credit and debit card payments for businesses and deposits the money into your bank account, usually within one to two business days.
- The service charges a transaction fee (a percentage plus a flat amount per sale) and a monthly gateway fee, with rates varying by business type and sales volume.
- Authorize.net integrates with shopping carts like WooCommerce and Shopify, point-of-sale systems, and accounting software, so you can accept payments without building custom code.
- The platform handles fraud detection and stores payment information securely under PCI compliance standards, reducing your liability for data breaches.
- You need a business bank account and a merchant account (which Authorize.net can help you set up) before you can start processing payments.
How Authorize.net processes a payment from start to finish
When a customer enters their card details on your website or at your register, Authorize.net captures that information and sends it to the customer's bank to verify the card is real and the account has enough money. This verification takes a few seconds. If approved, the transaction is authorized — the bank puts a hold on the funds. The money does not move yet; it is reserved.
At the end of the day (or whenever you choose), you settle the batch of transactions you have collected. Authorize.net sends all those authorized transactions to the banks involved, and the actual money transfer happens. Your bank account receives the deposits, usually within one to two business days. The customer's bank removes the hold and charges their account.
Throughout this process, Authorize.net logs every transaction, stores encrypted card data, and checks for fraud patterns — a card used in two countries in one hour, for example, or a card number that appears on a fraud blacklist. You can review all transactions in your Authorize.net dashboard, refund a sale if needed, or dispute a chargeback if a customer claims they did not make the purchase.
What Authorize.net costs and what is included
Authorize.net charges three main fees. The transaction fee is a percentage of each sale (typically 2.29% to 3.48%) plus a flat amount per transaction (usually $0.30). A monthly gateway fee of $25 covers access to the platform itself. Some businesses also pay a monthly minimum fee if their transaction volume is very low, though this varies by plan.
If you use Authorize.net's hosted payment form (a page they provide where customers enter card details instead of you building your own), there is no extra charge. If you want to store customer card information for recurring charges — like a subscription or monthly invoice — that costs $10 per month for the recurring billing feature. Refunds, chargebacks, and batch settlements do not carry extra fees.
Authorize.net does not charge setup fees or require a long-term contract. You can cancel anytime. However, you will need a merchant account, which is a special bank account that receives card payments. Authorize.net can help you open one, but the bank may charge a small monthly fee (usually $10 to $25) for maintaining it.
Which software and systems work with Authorize.net
Authorize.net integrates with most major shopping cart platforms. If you use WooCommerce, Shopify, BigCommerce, or Magento, you can install an Authorize.net plugin or extension and start accepting payments without writing code. The integration handles the connection between your store and Authorize.net's servers automatically.
For point-of-sale systems (the register software used in physical stores), Authorize.net works with Square, Toast, Lightspeed, and many others. If you use invoicing software like FreshBooks or QuickBooks, you can often connect Authorize.net so that payments received automatically update your records.
If you have a custom website or app, developers can use Authorize.net's API (a set of technical instructions) to build a custom payment form. This requires programming knowledge but gives you full control over how the payment page looks and behaves. Authorize.net provides documentation and code examples to help developers get your free guide.
Security and fraud protection built into Authorize.net
Authorize.net encrypts all card data using industry-standard security, which means card numbers are scrambled and unreadable if someone intercepts them. The platform is PCI DSS compliant, a set of security standards that card networks require. This compliance means Authorize.net regularly tests its systems for vulnerabilities and maintains strict rules about who can access customer data.
The platform includes fraud detection tools that flag suspicious transactions automatically. You can set rules — for example, decline any transaction over $500, or flag orders shipping to a different country than the billing address. Authorize.net also checks every card against fraud blacklists and velocity checks (how many times a card has been used in a short period).
If a customer disputes a charge with their bank (a chargeback), Authorize.net helps you respond by organizing the evidence — the order confirmation, shipping proof, or customer communication. You do not have to handle the dispute alone. However, if you lose a chargeback, the money is reversed and you pay a chargeback fee (usually $15 to $25).
Authorize.net compared to other payment processors
Authorize.net is one of the oldest payment processors and is owned by Visa, which gives it stability and wide acceptance. It works well for businesses that want a traditional, established processor and do not mind paying a monthly gateway fee. The monthly fee means it makes more sense for businesses processing a steady volume of sales; if you sell only a few items per month, the $25 monthly fee becomes expensive relative to your revenue.
Other processors like Stripe and Square charge no monthly gateway fee — you pay only per transaction. This makes them cheaper for very small businesses or those with unpredictable sales. However, Stripe and Square typically charge higher per-transaction fees (around 2.9% plus $0.30) to make up for the lack of a monthly fee. Authorize.net's combination of a monthly fee and lower per-transaction rates can be cheaper if you process enough volume.
PayPal's payment processor works similarly to Authorize.net but is more tightly integrated with PayPal's ecosystem. If you already use PayPal for invoicing or selling, PayPal's processor may be simpler. However, Authorize.net is more flexible for businesses that want to use multiple tools and do not want to be locked into one company's ecosystem.
What you need before you can start using Authorize.net
You need a business bank account in your business name. Authorize.net deposits money into this account, so the bank must recognize your business as the account holder. If you are a sole proprietor, you can use a personal account, but most processors prefer a business account.
You also need a merchant account, which is a special type of bank account designed to receive card payments. This is different from your regular business checking account. Authorize.net can help you open one through their partner banks, or you can open one through your own bank. The process takes a few days to a week and involves providing information about your business, your expected monthly sales volume, and sometimes your personal credit history.
Finally, you need to decide how you will accept payments — through a website, a point-of-sale system, invoices, or some combination. Once you know that, you can choose which Authorize.net product to use and set up the integration with your software.
Frequently Asked Questions
Does Authorize.net store my customers' credit card numbers?
Authorize.net stores encrypted card data if you ask it to, which is useful for recurring charges or one-click checkout. However, you can also set it up to not store card numbers at all — the payment is processed and then the card data is deleted. Either way, the data is encrypted and protected under PCI compliance standards, so Authorize.net is responsible for keeping it secure, not you.
How long does it take for money to show up in my bank account?
Authorize.net settles transactions in batches, usually once per day. After settlement, your bank typically deposits the money within one to two business days. Some banks are faster; some are slower. Weekends and holidays can add delays, so a transaction processed on Friday might not appear until Tuesday.
What happens if a customer wants a refund?
You can refund a transaction through your Authorize.net dashboard. The refund is processed back to the customer's card, and it usually appears in their account within one to two business days. Authorize.net does not charge an extra fee for refunds, but your merchant account may have a limit on how many refunds you can issue per month.
Can I use Authorize.net if I sell internationally?
Yes, Authorize.net processes payments from cards issued in most countries. However, international transactions may have higher fraud risk, so Authorize.net's fraud tools may flag more orders. You can adjust your fraud settings to be more or less strict depending on how much international business you do. Some countries have different regulations, so check with Authorize.net about your specific location.
What if I do not have a website — can I still use Authorize.net?
Yes. Authorize.net offers a virtual terminal, which is a simple form where you can manually enter a customer's card details over the phone or in person. You can also use Authorize.net with a point-of-sale system if you have a physical store. The virtual terminal charges the same per-transaction fee as a website integration.