There are numerous eCommerce merchant account providers in the payment processing industry today, and Authorize.net and PayPal are quite famous among them. Considering the fierce competition, we will today make a comparison between authorize.net and PayPal to help you choose one.
Points of Differences
Authorize.net is a payment gateway that connects payment processors with eCommerce transactions. On the other hand, PayPal is a full-stack payment processing service that works as a payment processor and a payment gateway.
- Pros and Cons
Authorize.net
| Pros | Cons |
| Offers broad support for numerous currencies. | The all-in-one plan is quite confusing. |
| Comes with strengthened security and anti-fraud features. | Has a high flat-rate pricing for getting an option merchant account. |
| Has a monthly billing cycle. | It is cheaper to use when bundled with another service. |
| Does not indulge in long-term contracts. |
PayPal
| Pros | Cons |
| Highly trusted by the customers. | Has account stability issues. |
| Has predictable flat-rate pricing. | Customer support is inconsistent. |
| A simple all-in-one payment system. | Not suitable for industries with high risks. |
| A good option for low-volume merchants. |
- Features
The features of authorize.net and PayPal merchant account provider overlap. However, the services of authorize.net are specialised, while those of PayPal are generic with a broader scope. Authorize.net cannot provide a merchant service to the clients but can hook them up with a service.
- Merchant Accounts
PayPal merchant account provider brings all its customers into a single uber-account where the payments are processed. It conducts third-party processing, where it takes its interchange fee and bank and service fee from the transaction.
On the contrary, Authorie.net does not has in-house merchant accounts, but can provide you with accounts through its partners.
- Point of Sale
The app of PayPal is intuitive and widely used by customers for making in-person purchases. It is free to use and allows the companies to track their inventory for a price of $39-$49 per month.
The app of authorize.net can accept mobile payments through a smartphone or a tablet, with a plug-in card reader. It is also free to use, but you have to purchase a card reader to conduct sales.
- Fraud Detection
Authorize.net comes with an Advanced Fraud Detection Suite (AFDS) to identify and eliminate potentially screwy transactions.
However, PayPal doesn’t have that robust security features but can handle PCI compliance for your business.
- Online Invoicing
The invoicing tools of PayPal are pretty solid and come with tipping and instalment options.
Authorize.net however does not yet have a fully-features invoicing system.
Key Takeaways
PayPal merchant account provider is a better option for low-volume businesses and authorize.net is a payment gateway, which cannot offer you a merchant account on its own. Therefore, their scope and area of work are quite different. However, if you need eCommerce support and have your own merchant account, authorize.net is a great option for your business needs.