Authorize.net vs. PayPal: Which Is Right for Your Business?

Authorize.net and PayPal are separated by cost and international capabilities, among other features.
Tina OremOct 6, 2021

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Authorize.net and PayPal are payment service providers, or PSPs, that help small businesses take payments in person and online. PayPal may be better for small businesses with an international customer base, but small businesses may prefer Authorize.net on price.

Here's how the two companies compare.

Payment service providers give small businesses a way to accept online payments through a payment gateway and a merchant account. Here are some things to keep in mind as you shop for a PSP:

  • What kind of pricing structure you want: interchange-plus, flat rate or tiered. Of course, your industry, sales volume and priorities will influence your answer.

  • Whether you need an integrated POS system. If you’re selling online, this may be less important.

  • What is your industry? This may influence pricing and other options.

Authorize.net pros and cons

Pros

  • Cost. For merchant accounts, Authorize.net’s transaction fees are lower than PayPal’s. Authorize.net fees are also flat, whereas PayPal charges more for American Express. Authorize.net’s prices are findable on its website.

  • Customer support. The company offers 24/7 phone support (excluding holidays), as well as an online ticketing system or chat. It also has an online knowledge base.

  • Recurring billing included. Recurring payments capabilities are included in all plans, which may be valuable if you run a subscription-based business. That's an optional add-on for PayPal.

Cons

  • Relatively limited international capabilities. For U.S. and Canadian businesses, Authorize.net only supports U.S. and Canadian currency. For U.K. and European businesses, it supports eight currencies, and it supports three currencies for Australian businesses.

  • No free version. You'll always have to pay a monthly fee, and that $25 could minimize or potentially negate the difference in transaction fees, depending on your monthly sales volume.

PayPal pros and cons

Pros

  • Transparent pricing. PayPal’s prices are findable on its website.

  • Relative ease of use. PayPal is designed specifically to make integration simple for non-programmers. Small-business owners who want something simple to set up may prefer a cut-and-paste interface.

  • International. PayPal accepts about two dozen currencies, and you can accept most of these currencies no matter where your business is.

  • Customer support. Though it’s not 24/7 like Authorize.net, PayPal has phone support from 8 a.m. to 8 p.m. Central time Monday through Friday. It also has text support, an online community and a resolution center for transaction or account issues.

Cons

  • Relative cost. PayPal can be more expensive than Authorize.net on a per-transaction basis.

  • Extra fees. Automated recurring billing is an add-on, but Authorize.net includes it for free.

Authorize.net features overview

Authorize.net is owned by Visa. It offers payment options for e-commerce, point of sale, mobile payments and over-the-phone payments. It also offers billing, e-check and mobile card readers. The company can process Visa, MasterCard, Discover, American Express, JCB, PayPal, Visa Click to Pay, Apple Pay and ACH transactions.

If your business is based in the United States, Canada, the U.K., Europe or Australia, you can accept international payments from anywhere in the world. However, for U.S. and Canadian businesses, Authorize.net only supports U.S. and Canadian currency. For U.K. and European businesses, it supports eight currencies, and it supports three currencies for Australian businesses.

Authorize.net integrates with 3dcart, BigCommerce, Magento and about 140 other platforms. The company also sells card readers and has a virtual point-of-sale software that can turn computers into POS systems.

Authorize.net offers two plans for payment processing.

All-in-One

Authorize.net offers this package for small businesses that want both a merchant account and a payment gateway. The package also comes with automated recurring billing, which can be useful for small businesses that sell subscriptions. And for an extra charge, it can process e-check payments (through ACH).

Payment Gateway Only

For small businesses that already have merchant accounts, Authorize.net offers this plan. Essentially, you pay the company to aggregate all of your transactions from the previous 24 hours into a “batch” that it sends to the processing networks. Like the All-in-One plan, the package comes with automated recurring billing and can process e-check payments (through ACH) for an extra charge.

PayPal features overview

PayPal lets small businesses accept and process payments in person and online. It offers two payment gateway services: PayPal Payments Standard and PayPal Payments Pro. PayPal’s services work with major e-commerce platforms such as BigCommerce, Wix and Shopify.

PayPal Payments Standard

This product may be best if you don’t have coding experience or a developer on your team, as you’ll simply need to copy and paste a line of code or integrate a plug-in with your existing shopping cart. Either option should only take 15 minutes to implement, according to PayPal’s website.

PayPal Payments Pro

This is a customizable checkout solution that also provides access to a virtual terminal so you can accept credit cards online, through mobile or with devices that don’t have an external card reader. Also, you can accept payments in 25 currencies from 200 countries, accept phone payments and get simplified PCI compliance.

Pricing: Authorize.net vs. PayPal

Both providers have various fees. Here’s how they compare.

Authorize.net

PayPal

Monthly fees

  • $25.

  • PayPal Payments Standard has no monthly fee.

  • PayPal Payments Pro is $30 per month.

Transaction fees

  • 2.9% + 30 cents per transaction with merchant account.

  • 10 cents per transaction and 10 cent daily batch fee if you only want to use the payment gateway.

  • PayPal charges 2.99% plus 49 cents per transaction if the funds are from a U.S. account. Nonprofit organizations get a discounted rate.

  • For American Express cards, the transaction fee is 3.5%. International transactions in other currencies have different fees.

Other fees

  • Custom pricing available for businesses that process more than $500,000 per year.

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

  • E-check processing is 0.75% of the transaction price.

  • Optional recurring billing services cost $10 per month.

  • Optional advanced Fraud Protection Services are $10 per month plus 5 cents per transaction.

  • Other fees, including chargeback fees and mobile card reader fees, are on PayPal’s merchant fees page.

  • Learn more about PayPal fees.

Authorize.net vs. PayPal: Which PSP is right for your business?

Authorize.net may be your best option if you want a relatively low price. But if international capabilities are more important, you may want to go with PayPal.