PayPal vs Authorize.net: Price, Features & What’s Best in 2022
Meaghan has provided content and guidance for indie retailers as the editor for a number of retail publications and a speaker at trade shows. She is Fit Small Business’s authority on retail and ecommerce.
This article is part of a larger series on Payments.
PayPal and Authorize.net are popular payment processors, handling millions of dollars in transactions per day. Easy to integrate with other applications, both are great choices for small businesses. However, PayPal offers more for in-person and international sales, while Authorize.net provides more stability, offers Level 2 and 3 processing for business-to-business (B2B) transactions, and is less expensive.
Each is featured on several of our best-of lists; however, the only one they have in common is best international merchant accounts, as their strengths play to different use cases. In short:
- PayPal: Best for solopreneurs, retail, and ecommerce
- Authorize.net: Best for B2B sales and adding a reliable payment gateway
When to use an alternative: Stripe is our top-recommended payment processing solution for online businesses. Its pre-built integrations and user-friendly developer tools make Stripe easy to add to any checkout. Plus, it offers hosted payment pages, flexible invoicing software, and advanced fraud and security tools.
PayPal vs Authorize.net At-a-Glance
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Best for | Solopreneurs, retail, ecommerce | B2B sales, adding a payment gateway |
Monthly fee | $0 | $25 |
Transaction fees | 2.29% + 49 cents to 3.49% + 49 cents | 10 cents per transaction + 10-cent daily batch fee (payment gateway only) to 2.9% + 30 cents (merchant account + payment processing) |
Chargeback fee | $0–$20 | $25 |
Virtual terminal | $30 | $0 |
Hardware | Card readers, countertop systems, receipt printers | Card readers, receipt-printers |
POS | Full (Zettle) | Partial (mPOS, vPOS) |
Payment types | 30+ | <10 |
B2B tools | Invoicing | Invoicing, Level 2 and 3 payment processing |
Chargeback protection | Yes (costs extra) | No |
Integrations | 250+ | 145+ |
Currencies | 25 | 13 |
Account stability | Okay, but not great—many complaints of frozen funds | Excellent for Authorize.net; not always great with resellers |
Average real-world user score* | 4.67 out of 5 | 4.12 out of 5 |
Ratings on Google Play | 4.3 out of 5 (Business) 4.0 out of 5 (Zettle) | |
Ratings on App Store | 4.4 out of 5 (Business) 3.4 out of 5 (Zettle) | |
*Averaged from multiple user review sites
Authorize.net (sometimes called AuthNet) offers greater account stability than PayPal, but not all of its resellers are as reliable; customers often complain about AuthNet when the problem is with the reseller. Authorize.net also provides better rates in general and is trusted by businesses.
PayPal, on the other hand, has excellent name recognition among consumers, better tools for accepting payments, and overall higher ratings—despite complaints of frozen funds.
Looking for something different? If you need to accept payments in-person, consider Square, which is our top-recommended mobile payments processor, and offers some of the best credit card readers on the market.
When to Use PayPal vs Authorize.net
Most Affordable: Authorize.net
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Monthly fee | $25 | $0 |
In-person transaction fee | 10 cents per transaction + 10-cent daily batch fee (payment processing only) to 2.9% + 30 cents (merchant account + payment processing) | 2.99% + 49 cents* |
Keyed-in transaction fee | Same as above | 3.4% + 49 cents* |
POS transaction fee | Same as above | Zettle only: 2.29% + 9 cents or 3.4% + 9 cents for keyed-in transactions |
Online transaction fee | Same as above | 2.59% + 49 cents |
Micropayments fees (transactions under $12) | Same as above | 4.99% + 9 cents |
Invoicing fee | Same as above | 3.49% + 49 cents per transaction |
ACH/echeck processing fee | Add 0.75% | 3.49% (max $300) |
International payment processing fee | Add 1.5% per transaction | Add 1.5% per transaction |
High-volume transactions | Interchange-plus pricing | No discounts listed |
Chargeback fee | $25 | $0–$20 |
Virtual terminal | $0 | $30 per month |
POS | $0 | $0 |
Card readers | $65 | $29 for your first reader, $79 for subsequent readers |
Countertop systems | N/A | $249–$699 |
*US rates; PayPal has different fixed fees for each country
Authorize.net has two plans: one for a payment gateway alone and another All-in-One package, which includes a gateway and merchant account. Both have a straightforward pricing scheme that stands in great contrast to PayPal’s complex pricing, which depends on the situation, country, and even what card your customers use. AuthNet is the cheapest choice as well.
- Its in-person rates are lower, especially since its flat fee is 19 cents less than PayPal’s.
- It’s cheaper for invoicing and keyed-in transactions.
- Even with PayPal’s special pricing for micropayments, AuthNet is cheaper for transactions of $10 and lower.
- It offers interchange-plus pricing for merchants processing over $500,000 annually.
- If you need a virtual terminal, then Authorize.net—even with the $25 monthly fee—comes out cheaper as far as monthly costs.
- Although it has a monthly fee, if you process more than 164 transactions of at least $12 each per month online, Authorize.net is cheaper than PayPal.
If all you need is a payment gateway, then Authorize.net’s payment gateway-only plan is by far the cheaper option. However, keep in mind that you will need to secure a merchant account—and that adds to your transaction fees. Check out our recommended merchant services for pricing of the best.
When PayPal Is Cheaper Than Authorize.net
If you use Zettle for in-person transactions, you get a far cheaper rate: 2.29% + 9 cents per transaction (3.49% + 9 cents per keyed-in transaction).
Because Authorize.net charges a monthly fee, PayPal is the cheapest in the long run for occasional merchants like solopreneurs or hobbyists. For online users, if you process fewer than 164 transactions of over $12 each per month, PayPal is the less expensive option.
Charities will also find PayPal’s rates superior. It offers a discounted nonprofit rate of 1.99% + a fixed country fee (49 cents in the US).
PayPal may even be cheaper than Authorize.net for certain countries. If you are not a US-based business, check PayPal’s payment page.
Best for Merchant Account Features: Authorize.net
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Merchant account type | Individual | Shared |
Payment types | Credit card, NFC, echeck, PayPal | Credit card, NFC, e-check, PayPal, Venmo, bitcoin, Bancontact, iDEAL, and more |
Interchange-plus pricing available | For merchants processing >$500,000 per year | No |
Convenience features | Account updater, Visa click-to-pay | One-click payment processing |
Onboarding | For high-volume sellers | No |
High-volume discounts | For merchants processing >$500,000 per year | No |
Level 2 and 3 processing | Yes | No |
High-risk merchants | Yes, though partners | Restricted |
Payout | 24 hours | 2–3 business days (regular account); same day (PayPal account); pay extra for immediate withdrawal |
Authorize.net offers more merchant account features than PayPal. They process the same kinds of payments—AuthNet 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 merchant account, Authorize.net may be the better solution, as its all-in-one plan includes a merchant account. It keeps most of these in-house, but if it can’t support your business, it works with a trusted partner. AuthNet merchant accounts are individual—one account per business. This makes for greater stability and less chance of frozen funds, something that PayPal has a bad reputation for as an aggregator.
AuthNet 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.
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 if you pay an extra fee.
When to Choose PayPal
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 bitcoin, PayPal is your best choice. Authorize.net may do this, but only with an integration, which could add fees. PayPal also offers several alternate payment methods that are popular in non-US regions like GrabPay, Mercado Pago, and iDEAL.
Best for Fraud & Chargeback Security: PayPal
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Transaction security | PCI-DSS compliance, SOC 1, TLS encryption | PCI-DSS compliance, TLS encryption |
Fraud protection | Machine learning and analytics | Advanced Fraud Detection Suite, fraud filters |
Chargeback protection | Accepts liability for eligible transactions (Additional fees apply) | None |
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 AuthNet 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)
When to Choose Authorize.net
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 not only leads to lost transactions but also a strike against your store’s reputation. AuthNet’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.
Best for Ecommerce: PayPal
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Best for | Integrations or as an alternative to other payment processors | Integration with a shopping cart |
Integrations | 250+ | 145+ |
Buy Now Buttons | ✔ | ✔ |
Use alongside other payment processors | Encouraged | Acceptable |
POS features | Payment processing only | Payment processing only |
Invoicing | ✔ | ✔ |
Recurring billing | ✔ | ✔ |
Virtual terminal | $30 per month | Included |
Social selling | Buttons, links | Buttons |
Customer management | Customer information only | Customer information only |
Payment features | Buy-now-pay-later, tips, automated reminders | Account updater |
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. An Ipsos study (commissioned by PayPal) from 2018 showed the presence of PayPal led to an increase in willingness to buy of 54% and a decrease in abandoned carts of 18%. Although we haven’t found a more recent study, Authorize.net hasn’t been shown to have this level of consumer recognition or trust.
PayPal’s Pay in 4 program can add further incentive to buy or purchase more—it costs you nothing to sign up for it. Pay in 4 allows consumers to pay 25% at the time of purchase and pay the rest in biweekly installments of 25%; we rated it among the top buy now, pay later apps. Visa, which owns Authorize.net, has a similar program called Visa Installments, but it’s separate from AuthNet.
When to Choose Authorize.net
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, then you may want to consider AuthNet 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.
Best for In-person POS: PayPal
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Payment features | Tips, taxes, partial refunds, gift cards | Tips, taxes |
POS System | Zettle—complete register system | vPOS—chrome extension that accepts payments; not a full POS system |
Inventory features | Images, variants, low-stock alerts | None |
Customer management | Customer payment and shipping information | Customer payment and shipping information |
Loyalty | PayPal with Rewards | Third-party app |
Gift cards | Online and physical; premade or custom designed | Accepts if you disable the Address Verification System |
Integrations | 250+ | 145+ |
Reports | Basic | Basic |
Hardware | Card readers, countertop systems, accessories. Can use your own tablet. | Card readers, receipt printers. Use your own computer or laptop. |
PayPal offers the best tools for in-person sales because its mobile POS (mPOS), Zettle, can function as a countertop register when used on a tablet. It can take any payment type PayPal processes, issue partial refunds if needed, track inventory, and more. It’s a fully functioning application that can also integrate with your ecommerce and accounting software and your PayPal business account.
Authorize.net, meanwhile, offers a simple Chrome extension that lets you use a laptop or computer as your POS system. It has a few inventory functions but is not as feature-rich or easy to use as Zettle.
When to Choose Authorize.net
If you want a simple payment and inventory system, Authorize.net offers a virtual POS (vPOS) as a Chrome extension, and its features are similar to Authorize.net’s mPOS. You need an Authorize.net account to use it. It’s best for service industries or nonretail services that only do occasional in-person sales—for example, the kind of transactions you might do with someone sitting across a desk as opposed to standing at a counter.
Best for International Sales: PayPal
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International payment fees | Add 1.5% | Add 1.5% |
Merchant countries | 200+ | 3 |
# currencies | 25 | 13 |
# countries | 200+ | Unspecified; takes transactions worldwide |
# languages | 4 | English |
Presents in local currency | ✔ | Depends on integration |
Payment methods (not credit cards) | PayPal, e-checks, Venmo, virtual wallets, others with approval | PayPal, e-checks, Apple Pay, Visa Click-to-Pay |
Credit cards supported | 7 | 5 |
PayPal is the best for international sales as it offers more languages, works in more countries, and presents in local currency. It allows alternate 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.
AuthNet 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)
When to use Authorize.net
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.
Best for Mobile: PayPal
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Ratings on Google Play | 4.3 out of 5 (Business) 4.0 out of 5 (Zettle) | |
Ratings on App Store | 4.4 out of 5 (Business) 3.4 out of 5 (Zettle) | |
Full POS | ✔ | Item catalog only |
Accept tips | ✔ | ✔ |
Email receipts | ✔ | ✔ |
Syncs w/ online store | ✔ | ✖ |
CRM tools (collect email, craft campaigns) | ✔ | ✖ |
Integrations | Some | ✖ |
Card readers | $29 for your first reader, $79 for subsequent readers | $65 |
Offline mode | ✖ | ✖ |
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. AuthNet, 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 for 2022.
PayPal Zettle is a complete POS system that you can use on your smartphone or tablet to use as a register. (Source: App Store)
When to Choose Authorize.net
Authorize.net’s mPOS app, which works with a variety of card readers, is simple. You are logged in to 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, 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.
Best for Ease of Use: PayPal
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Application approval | Immediate | 1 hour to 5 days for a merchant account |
Setup time | Minutes | Minutes |
Payment platform setup | Easy | Easy |
Payment tools setup (POS) | Easy | Confusing |
Account stability | Not good—complaints of frozen accounts | Authorize.net is good; resellers vary |
Integrations | Plug-and-play, APIs | Plug-and-play, APIs, resellers |
Business restrictions | Medium and high-risk businesses covered in PayPal’s Acceptable Use Policy | Depends on reseller |
Capterra User Reviews Ease-of-Use Score |
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 AuthNet’s mPOS and vPOS. Authorize.net’s help section was not the easiest to get information from, either.
When to Choose Authorize.net
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.
Best for Customer Support: PayPal
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Online help articles | Good | Terse, not illustrated, does not answer many questions |
Video tutorials | Many in the Help Section | Few on YouTube |
Phone support | Extended phone support | None |
User reviews (averaged) | 4.67 out of 5 | 4.12 out of 5 |
Additional services | Loans, advances, credit cards | None |
Again, PayPal takes the lead. 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 AuthNet 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.
When to Use 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.
Bottom Line
If you need just a payment processor or a payment processor plus merchant account for integrating with other applications, Authorize.net offers the cheapest and most consistent pricing and virtual terminal. If you need in-person sales, especially for retail, are an occasional seller, or want quick and easy options for adding payments to a website or social media, PayPal is your best bet.
