Authorize.net vs PayPal: Price, Features & What’s Best in 2023

PayPal takes the lead in ecommerce because of its adaptability and ease of integration. It offers over 250 partner integrations to ecommerce software and marketing tools for accepting online payments. Alternatively, you can make use of its button generator, which creates codes that you can copy and paste into any website or social media outlet.

PayPal’s buttons can be added to any website, email, or social selling venue, even alongside other payments. The PayPal Ecommerce Index 2022 showed that 25% of consumers prefer to use PayPal, higher than those who prefer to pay with credit or debit cards. This shows consumers’ high level of trust in PayPal as a payment method.

PayPal’s Pay in 4 and Pay Monthly programs can add further incentive to buy or purchase more—it costs you nothing to sign up for it and you still get your sales proceeds upfront. Pay in 4 allows consumers to pay 25% at the time of purchase and pay the rest in biweekly installments of 25%, while Pay Monthly is for purchases worth $199 to $10,000 to be paid with monthly installments over a 6- to 24-month period. We rated it among the top buy now, pay later apps.

The button generator makes colorful PayPal buttons to add to social media or any website. (Source: PayPal)

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PayPal says including a PayPal button in your shopping cart can increase conversions. (Source: PayPal)

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With over 250 apps, it’s easy to integrate PayPal into your ecommerce software. (Source: PayPal)

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PayPal is the clear winner when it comes to mobile. It offers several mobile apps depending on your need, but our favorites are PayPal Business and PayPal Zettle. Authorize.net, meanwhile, offers a basic payment processor with some inventory functions.

If your primary need is sending invoices and keeping track of online sales, PayPal Business is your best choice. It has a simple invoice maker you can use to create and send custom invoices right from your phone. It tracks customer contact information and sales data and has basic analytics and reports to see how your business is thriving. You can also use it to transfer money from PayPal to your bank or to pay bills.

PayPal Business lets you handle your transactions and customers from your phone. (Source: App Store)

If you are a retailer or service provider and need a POS system, then PayPal Zettle can meet your needs (you’ll need a PayPal card reader to accept payments). Designed for phones or tablets, it offers a register-like checkout, inventory tracking, tips, taxes, split payments, and more. You can even set up multiple staff accounts for tracking individual sales. It’s listed as one of our best mobile credit card processors.

PayPal Zettle is a complete POS system that you can use on your smartphone or tablet to use as a register. (Source: App Store)

PayPal is still a good option for international sales, despite its high currency conversion spread (the difference between the market foreign exchange rate and PayPal’s), as it offers more languages, works in more countries, and presents in local currency. It allows alternative payment methods that may be more popular in Asia and Europe, such as Bancontact, Giropay, and GrabPay. You may need approval to use these methods, and transaction fees vary.

Authorize.net has a far smaller list of accepted payment methods. And while it accepts payments from anywhere in the world as long as its approved payment methods are used (such as Visa), it works only with merchants in the US, Canada, and Australia. (Because of changes in encryption protocols in the EU, it stopped working with merchants in the UK and Europe.)

Although PayPal works in over 200 countries, it offers only four languages. (Source: PayPal)

If most of your sales are through a virtual terminal (such as mail order/telephone order sales), then Authorize.net is the cheaper choice while still offering a good terminal.

In addition, if you depend on recurring sales or subscriptions, you may want to consider Authorize.net because it has an account updater feature, which updates credit card information, such as when a customer gets a replacement or a new one after the other expires. It costs extra but ensures a seamless continuation of subscriptions with no effort by you or your customer. PayPal’s Braintree has this function, but PayPal does not.

Authorize.net’s mPOS app, which works with a variety of card readers, is simple. You are logged into the payment screen, where you can type in an item description and add the cost and tips. You can create multiple tax rates and apply them to specific products. It lets you create a product catalog with items like name, universal product codes (UPC), price, tax, and image. It does not have low-stock alerts, however.

Like most apps of its kind, you can create custom receipts that you can mail or print. The online tutorial is very basic, and you cannot explore this app until you have logged in with your Authorize.net account.

If you are a business based in the US, Canada, or Australia and are content to take payments with Visa, Mastercard, Discover, American Express, JCB, Apple and Google Pay, and PayPal, then Authorize.net is a fine choice. Plus, it’s less expensive than PayPal in most circumstances and has a simpler payment structure.

PayPal’s payment type offerings are not as diverse as Authorize.net’s, but they are more than sufficient for the solopreneur or small business. PayPal also offers other tools and features that make it worthwhile. (We explore those in greater detail below.)

If you want to accept cryptocurrency, PayPal is your best choice. Authorize.net may do this, but only with an integration, which could add fees. PayPal also offers several alternative payment methods that are popular in non-US regions, like GrabPay, Mercado Pago, and iDEAL.

While both provide excellent transaction security, machine learning, and analytics, PayPal provides better fraud and chargeback protection. It uses machine learning and data from its network of over 41 million transactions a day to identify fraud trends to catch fraudulent transactions before they happen.

It offers multiple fraud filter categories tailored to your business. To make recommendations, it learns from your payments and all those on its system in general. You can then select which filters you want to apply.

PayPal representatives are also available to help if your employees notice anything suspicious. If there’s a problem with a transaction, PayPal holds funds until the issue is resolved, working with you and the customer throughout the dispute. Note that it charges chargeback and dispute fees; however, if you sign up for chargeback protection, then it can waive these fees for qualifying purchases. This is a program Authorize.net does not offer.

With Seller Protection, PayPal accepts liability for fraudulent transactions leading to chargebacks and for items not delivered. Protection only applies to physical products delivered with a service (as opposed to in-person deliveries). PayPal charges 0.4%–0.6% per transaction, depending on the level of service you select.

PayPal offers an extensive list of filters for fraud identification. (Source: PayPal)

PayPal is the simpler of the two choices. To start, you always deal with PayPal, while Authorize.net works with resellers as well, which can cause confusion. Getting an account and setting up with PayPal only takes a few minutes, although there may be restrictions for higher-risk businesses. Authorize.net can take longer if you get the All-in-One Plan and need a merchant account. The flip side of this is that Authorize.net has greater account stability, although resellers may not.

PayPal’s tools are easy to use and have clear explanations. Meanwhile, we spent a lot of time trying to figure out exactly what to expect from Authorize.net’s mPOS and vPOS. Authorize.net’s help section was not the easiest to get information from, either.

PayPal scored better in this aspect. First, its online help articles make it easy to get answers to your questions and offer step-by-step instructions and video tutorials. If you can’t find the answer you need, there’s text-based support and phone support. PayPal’s phone support is extended business hours only but is still better than Authorize.net’s, which doesn’t provide phone support numbers on its website. Even more, if you are working with an Authorize.net reseller, you may need to contact them first.

PayPal goes beyond support for its tools, however, and can help your business with loans, advances on sales, and even credit card services. Authorize.net does not have these extra advantages.

Real-world customer reviews reflect all this. Despite some complaints about frozen funds, customers rated PayPal at 4.67 out of 5 stars as opposed to Authorize.net’s 4.12 out of 5. These scores were averaged from Capterra, G2, and TrustRadius, which are trusted user review sites for business software.

Authorize.net offers more merchant account features than PayPal. They process the same kinds of payments—Authorize.net even processes PayPal; however, where it’s set apart is in what it offers to different types of merchants. While both work with high-volume merchants, Authorize.net offers interchange-plus pricing, which is generally cheaper than flat-rate pricing. It will even help you onboard, a service PayPal does not provide.

Also, if you need a dedicated merchant account, Authorize.net may be the better solution, as its all-in-one plan includes a merchant account. If you already have a merchant account, check that it is one of Authorize.net’s trusted partners. Having your own merchant account makes for greater stability and less chance of frozen funds, something that PayPal has a bad reputation for as an aggregator.

Authorize.net handles PCI Level 2 and 3 transactions, which are for business credit cards, so it’s great if you are primarily a B2B business. High-risk businesses are also more likely to be accepted by Authorize.net, which works with trusted partners such as PaymentCloud and other top high-risk merchant account providers.

The provider says it pays out in 24 hours, which is better than PayPal. However, PayPal does pay instantly if it goes into your PayPal account or to your bank if you pay an extra fee.

One potentially expensive aspect of chargebacks that’s not often mentioned is false rejection, where a legitimate transaction is marked as fraudulent by your fraud detection service and rejected. This can discourage your customers, especially those who make large or frequent purchases (which can trip some detectors). This leads to not only lost transactions but also a strike against your store’s reputation. Authorize.net’s Advanced Fraud Detection Service helps you identify fraud and act on false positives.

You can set fraud filters and select how you want to deal with transactions that are flagged as fraudulent. You can:

• Process as normal. This approves the transaction and reports that the filter was triggered. It’s also a good choice for testing your filters.
• Authorize but hold for review, which gives you 30 days to accept or void the transaction. After that, the transaction expires.
• Not authorize and hold for review, which gives you five days to approve. After that, the transaction expires.
• Decline the transaction.

PayPal also has customizable fraud filters, but you get only a simple approve/decline choice.

Many merchant services and business software that act as resellers are designed to accept payments using Authorize.net. Some of these resellers can accept high-risk merchants. (Durango, for example, works with Authorize.net and is one of our best high-risk merchant account providers.) If you are using one of these solutions, then it might be an easier option than integrating PayPal. Keep in mind that you can always add PayPal alongside Authorize.net.

Authorize.net did not score badly for customer support. Its how-to section was adequate but focused mostly on integrating and activating accounts and not on the tools it offers, like vPOS. If you’re using other POS or software for collecting payments and like Authorize.net, you’ll find customer support adequate.