What is the best merchant processing solution?

Authorize.net isn't really a processor - it is a gateway, which provides an access and control interface to the processor. It can work with almost every processor. Historically when you just went to Auth.net and signed up for an account they would connect you with one of their resellers (processors). Since they are referring to a lot of different processors you can get very different terms and conditions going straight through auth.net.

A better solution is to find a processor that you like - a full list of the 800 Visa- approved merchant acquirers is here - http://transfs.com/credit-card-processing-directory and then ask them to set you up an auth.net account. The standard pricing for Auth.net is $10 / month, 0.05 / transaction, $99 setup fee and first 200 transactions free. They also have some higher volume tiers for businesses doing several thousand transactions / month. Often you can get better pricing from a processor itself.

Beanstream has a good gateway, but their processing in the US is driven by First Data (not a bad thing) and uses ERR pricing (a very very bad thing - details here - http://transfs.com/blog/2009/10/09/enhanced-recover-reduced/. Fortunately their gateway can be used with any other processor using the First Data platform so, like Auth.net, you could use another processor for processing and Beanstream for gateway.

If you want to not get ripped off by your processor the two most important things to do are: 1. make sure you have a $0 cancel fee or a zero-length contract and 2. interchange plus pricing (details - http://transfs.com/blog/2008/08/22/why-you-should-want-interchange-plus-pricing/). The first will give you the power to switch if you start to have a bad experience, the second is the most transparent way of pricing a credit card processing contract. IF you want more tips on not getting ripped off - http://www.smallbizdaily.com/2010/05/06/5-tips-for-not-getting-ripped-off-by-a-credit-card-processor/

If you are considering using a gateway that, unlike Auth.net, cannot work with every processor, for example, chase's orbital gateway, keep in mind that it will make it much harder and riskier for you to switch processors.

First Data also has a decent gateway, called First Data Global Gateway (used to be called Linkpoint), which works with First Data and also works with the 600 or so processors (technically called Merchant Acquirers) that lease access on First Data's network.

If you want to get very quick comparison of reputable processors with great pricing, peer-reviews, etc. give my company a shot, http://transfs.com - we are like priceline for credit card processing. It's free, we don't sell your information and we won't bug you.

If you don't care about the customer leaving your site:

Amazon Payments (underrated in my opinion)

PayPal

Google Checkout

If you need to seamlessly integrate a payment form in your site:

-PayPal Payments Pro ($30/month for a virtual terminal and API integration, no contracts, 2.9% transaction, it's really hard to find a merchant company that can beat this unless you're talking in volumes).

-Authorize.net coupled with the merchant company of your choice.

When evaluating a merchant company, beware of contract stipulations, transaction fees, and monthly fees. My first provider was Cardservice International (one of the largest) and I used LinkPoint for the online gateway. I was paying $60-80/month just for the service! (transaction fees excluded) AND I was locked in a 2-year contract with an insanely high cancellation fee. One of their fees was a mandatory $20 "customer service fee" for access to their 24/7 customer service team. (WTF?)

Just be careful when evaluating merchant companies. Try starting at your bank (as long as it's not Chase, BoA, or Wells Fargo). Generally, local community banks or credit unions will have fair pricing and good customer service for merchants.

Here is a recent survey on e-commerce providers that you may find useful.

I use FastSpring and really appreciate it. Easy to manage and great support.

If you're looking to take pre-orders, be very careful. Most credit card processors don't allow this. You may be able to get around it by taking an authorization and not actually charging them until you ship the product, but the authorization only holds for a certain amount of time so probably won't work for you. Or you can sell a gift certificate or something else that you can deliver immediately that can be redeemed for the product when it's available. This can get tricky and you should research it carefully before going down this path.

We tried to use PayPal to take pre-orders and it was going great for a while, until PayPal called and ended up reversing all of our charges. When we did ship, only a small fraction of the customers ended up bothering to complete their order a second time.

It is true that PayPal can freeze funds, but it's the easiest way to get started.

I recommend starting with PayPal (not Google; PayPal is better about international credit cards), and then working towards another solution only when your company is off the ground and you can afford to spend time and money on a merchant account and a real gateway.

When you're ready for a real gateway, I like Authorize.NET.

I also use Fastspring, and couldn't be happier. They allow you to make your payment page look just like your website, which I did. It's hard for the buyer to even know that they left my site, unless they look at the URL. Plus, Fastspring automatically includes PayPal as an option in addition to standard credit cards, for those buyers that do like using paypal.

Fastspring is also very easy to set up, and includes many options, like having information on the transaction sent to your website for further processing. They can even generate product keys for you if you want. And, no, I don't have any affiliation with them, just a very satisfied customer.

When my partner and I were getting ready to launch, I looked at Google Checkout. At the time, it seemed to be tailored for tangible products that are shipped. Since our products were downloads, it didn't seem like a good fit. I'm not sure if Google has changed their model on this.

I heard too many complaints about customer service and high fees to even consider PayPal.

We ended up going with Authorize.net and we've been very happy. The level of integration you do with them is up to you. You can set up a simple integration model or it can get about as complex as you want. They have a lot of code examples for their advanced integration model, so it's pretty easy to get set up.

Bottom line: If you want flexibility in your payment system (for downloads, subscription, etc.), stay away from Google and PayPal. I would recommend Authorize.net wholeheartedly.

Disclaimer: I'm not affiliated with Authorize.net. I'm just a happy customer.

We use CyberSource (which now also owns Authorize.net I think).

Our challenge with simpler providers is that we have a subscription-based product and at the time, the implementation of subscriptions in things like PayPal were a bit weak. We wanted a relatively rich set of functionality, including the ability to get to the data for reporting and finance purposes.

It's worked out well so far, but the API is a bit cumbersome.

I like Fastspring, they have nice reports and great tools to integrate with your site for conversion tracking.

I recently did some extensive research on this subject. There are many choices and lots of mixed reviews.

I have been using PayPal Website Payments Standard without problems for almost a year now. It's very cheap, reliable, and simple to setup. However, our company needs a more integrated and professional solution. After checking online and with 3 local/regional banks, I finally decided to go with Chase Paymentech. My decision was based on their terms, rates, and flexibility.

Paymentech's standard solution includes their proprietary payment gateway, Orbital. They also offer support for Authorize.net, which I opted for instead. By choosing AuthNet for the front-end gateway, I can later switch to another merchant account provider that supports AuthNet and avoid rewriting a lot of code. This is my plan B strategy just in case Chase sucks as a payment processor.

I would also check with local banks. You may have better luck than I did. The three local banks I checked with all seemed clueless, charged high fees, and required multi-year contracts. Watch out for contracts and hidden annual fees.

This is a good place to start:

• http://www.merchant-account-services.org/article/merchant-accounts-compared
• http://credit-card-processing-review.toptenreviews.com/

This is my opinion, I started using Google Checkout and everything was going well... until the day came where I needed to process a payment with an international credit card... Google kept rejecting the card because of fraud suspicion, it took a long time until I was finally able to process the payment, not good!

It is true that PayPal it's better for international credit cards, at least in my own experience. However, their fees are higher than Google's... If you don't need to process international credit cards (it's hard not to do these days) then I recommend Google, otherwise go with PayPal but try to setup a merchant account with a gateway as soon as you can.

There are many good gateways, but I also agree with Jason(above) that Authorize.net is good, I've used in the past to help clients integrate it with their e-commerce sites, the tools they provide make it real easy to work with them.

Good Luck!

Consider using Beanstream (http://beanstream.com), especially if you want to do non-standard payment situations like pre-orders (you would use their billing profile API to store customer card details for later use but never on your own servers), or recurring billing, or debit, echeck, or Interac (Canada). Beanstream is based in Canada but they do support US merchants as far as I know. If you're based in Canada, even better.

We use PayPal Payment Pro and recommend it to our clients

Try CostCo's credit card processing offer, available to "executive" members. It's very reasonably priced and it offers good online payment processing options.

The best solution depends on your needs. Paypal is really good if you don't have transactions that exceed $1000 per month. After the threshold of $1,000 per month, their fees get expensive and it's better to go with another company. Obviously you can only use Paypal for a gateway processing provider, another limitation.

There are other companies that have great services like no annual contracts, no cancellation fees, no hidden fees and volume rates. You can research this through Google.

It is true that small business owners who choose to forgo signing up for a merchant account do miss out on some of the protections that merchant accounts offer.

It is really all about risk/reward when considering which is best for your company. By some estimates as much as 5% of a small businesses transactions may be contested depending on the industry/way the transaction is processes.

For you as the small business owner if that 5% is going to cost more than the cost of a merchant account then I think you are better off finding a merchant account to fit your business needs. I think it is a little bit of an overstatement that PayPal/Google will freeze your entire account for one or two bad transactions, but if it looks like there is a pattern (whether or not it is on purpose) then they will freeze the account to protect themselves from the liability issues.

If you are looking for a competitively priced merchant account option my website at offers some rankings based not only on the "lowest available rates" that are on the processors websites, but also the fees and dues associated with those accounts. There are hundreds of merchant account providers out there so I'm sure you can find one that will fit your business best.

We use and recommend Authorize.net to our clients. It offers payment processing gateway that completely and securely automates card authorizations and transactions direct to your bank or credit card network. Card purchases can be approved/transacted in real time online through The payment gateway is PCI compliant and supports a broad range of payment solutions, all card types, card present and not present transactions, dynamic DBAs, purchasing card transactions, and more.

We have been working with them for a number of years and they have proven very reliable. Hope this helps!