Authorize.net

A public corporation founded in 1996 in Utah, Authorize.Net is a payment gateway service provider, which is a system of processes and technologies that allow merchants to electronically submit credit card payment transactions to payment processing networks, such as a Credit Card Interchange and the ACH Network.

Authorize.Net services allow merchants to accept credit card and electronic checks payments through their company website and over an IP (Internet Protocol) connection. Like other payment gateways, Authorize.Net also provides merchants with transaction management, reporting, and billing services. The company is considered the world’s largest payment gateway service provider with just under a quarter of a million individual merchant accounts.

Authorize.Net provides all of its payment gateway services to merchants through authorized resellers only. These independent resellers typically provide the merchants with merchant accounts and related services, something that Authorize.Net does not supply in any form.

Services

Authorize.Net provides merchants two methods to integrate their payment gateway services into the merchant’s company website. The first method they use is called the Simple Integration Method or SIM. As is implied in the name, this method is the more technically straightforward and direct of the two. Merchants who use the Simple Integration Method essentially send their online customers directly to the Authorize.Net website where a secure order page captures all of their credit card transaction information. When the sales transaction is complete, the customer is routed back to the merchant’s company website. This method is usually preferred by small companies that do not have the technical capabilities to do a more advanced integration available to them.

The second method of payment integration that Authorize.Net provides merchants is called the Advanced Integration Method or AIM. This second method of integration is more complex in operation, but significantly more powerful then the Simple Integration Method. The Advanced Integration Method utilizes the Authorize.Net API to process credit card sales transactions without the customer leaving the merchant’s company website. The customer remains unaware of the background transaction process, so their final checkout process runs seamlessly. The AIM method is almost always chosen by larger corporations that wish to present their website, shopping, and purchase process in most professional manner possible.

Process

An Authorize.Net payment gateway account enables a merchant to authorize, settle and ultimately manage all credit card and electronic check payments. During a typical online credit card sales transaction, a merchant submits a credit card transaction to the Authorize.Net payment gateway on behalf of their customer (the card holder) through a secure connection from a website, a retail station, a MOTO center or a wireless device.

Authorize.Net then receives all secure transaction information and passes it though a secure connection to the merchant bank’s processor. The merchant bank’s processor submits the credit card transaction to the Credit Card Interchange, which is a network of financial entities that communicate in order to manage the processing, clearing and settlement of each credit card transaction.

The Credit Card Interchange routes the credit card transaction to the customers Credit Card Issuing bank or third party. The Credit Card Issuer approves or declines the credit card transaction based on the customer’s available account funds and passes along all of the transaction results.

If approved, the appropriate funds return back through the Credit Card Interchange, who relays the transaction results to the Merchant Bank’s Processor. The Merchant Bank’s Processor then relays the credit card transaction results back to Authorize.Net. Authorize.Net then stores the credit card transaction results and sends them to the merchant and/or customer. This communication process averages only a few seconds. Finally, the Credit Card Interchange passes the appropriate funds for the credit card transaction to the Merchant’s Bank, which then deposits these funds into the merchant’s account. The funds are typically deposited into a merchant’s primary bank account within two to four business days.

Authorize.Net then receives all secure transaction information and passes it though a secure connection to the merchant bank’s processor. The merchant bank’s processor submits the credit card transaction to the Credit Card Interchange, which is a network of financial entities that communicate in order to manage the processing, clearing and settlement of each credit card transaction. The Credit Card Interchange routes the credit card transaction to the customers Credit Card Issuing bank or third party. The Credit Card Issuer approves or declines the credit card transaction based on the customer’s available account funds and passes along all of the transaction results.

If approved, the appropriate funds return back through the Credit Card Interchange, who relays the transaction results to the Merchant Bank’s Processor. The Merchant Bank’s Processor then relays the credit card transaction results back to Authorize.Net. Authorize.Net then stores the credit card transaction results and sends them to the merchant and/or customer. This communication process averages only a few seconds.

Finally, the Credit Card Interchange passes the appropriate funds for the credit card transaction to the Merchant’s Bank, which then deposits these funds into the merchant’s account. The funds are typically deposited into a merchant’s primary bank account within two to four business days.