My Merchant Account Blog

Comparison of Fees and Options for Six Payment Gateways

Sunday, October 23, 2011

So you have got your online business up and running and you are ready to start taking orders from your customers. The only thing left to decide is what online merchant payment gateway are you going to use and what difference does it make? If you have done your homework then you know that there are quite a few online merchant payment gateways available to you. To start with it is good to understand just what you are dealing with. What is a merchant payment gateway? Is it different from my online merchant account?

• A merchant account is a bank account that allows you to accept credit cards, debit cards and checks. You can set this account up directly with a bank or go through a merchant payment gateway.
• An electronic payment gateway is a service that authorizes credit cards, debit cards and check payments for online businesses.  It can be compared to the POS terminal at the local market.

To begin with you need to add a gateway to link your online merchant account to your online business using a major processor of credit cards, debit cards and checks. Some merchant account providers can have their own payment gateways like Quantum Gateway or First Data Global Gateway. Some of the other electronic payment gateways are Authorize.net and Payflow, which is owned by Paypal. Usually these gateways have two components:

1. A virtual terminal that allows the merchant to log in and then key in the credit or debit card numbers. It should be noted that only debit cards with VISA or MasterCard logos are accepted by most gateways.
2.  An API to allow the merchant to process secure transactions on their own website – maintaining a consistent shopping process for the buyer. Most merchants prefer this method.
   An electronic payment gateway should also offer the merchant the ability to process transactions on the gateway's secure server.  This usually will cause the consumer to be directed to another website, sometimes causing problems with the checkout / payment.

The payment gateways offer a variety of fees and services. In this article we will compare several prominent gateways in terms of:

• Set up fees: Charged to set up your payment gateway
• Transaction Fees: Charged for every transaction
• Monthly charges: Monthly service fee
• Recurring billing: Charged for transactions that occur every month such as a service subscription
• Basic Fraud Controls
  • Address Verification Service (AVS)
  • Card Verification Value 2 (CVV2 - Card Verification Code (CVC2) - Card Identification Number (CIN)
  • IP Block
• Advanced Fraud Controls / Fraud Prevention Systems
• Integration with billing systems and shopping carts
• Detailed Reports
• Processing Controls

We have looked at five electronic payment gateways websites to compare the above fees and services. The prices we have posted are prices gathered from their respective website. The gateways we will compare are:

• Quantum Gateway
• Authorize.net
• Payflow Link
• Payflow Pro
• First Data Global Gateway / LinkPoint
• Yahoo® Payment Gateway

Electronic Payment Gateway Fraud Prevention Options

Some of the electronic payment gateways offer a proprietary fraud prevention system.  This could be compared to whether or not to have "open source code".  One key point to consider, the First Data Global Gateway might support large corporations, however, some of these transactions (like McDonald's) do not have anything to offer e-commerce retailers.

Basic Fraud Controls

• AVS – Address Verification Service: matches the address entered for the transaction with the address on file for the credit card
• CVV – Card Code: The code found on the back of a credit card
• IP blocking

Advanced Fraud Controls

• Verified by Visa (VBV: A password is added for anyone using a VISA card)
• Mastercard Secure Code (MSC: A code added for anyone using a Mastercard)
• Maxmind Geo IP - A fraud protection program available to anyone
• Proprietary Fraud Measures Unique to Each Gateway

Electronic Payment Gateway Fees

This is something for you to really consider when getting a merchant account.  Some electronic payment gateways will have fees on top of what the merchant account provider will charge.  These fees were gathered from the electronic payment gateways' respective website:

See PDF of Table	set fee	Monthly Fee	Transaction Fee	Basic Fraud Prevention	VBV / MSC	Advanced Fraud Prevention	Proprietary Fraud Prevention	Recurring Billing	Virtual Terminal	API	Gateway Secure Site	Credit Card Number Storage	Support
Quantum Gateway	$0.00	$0.00	$0.00	Inc	Inc	Inc		Inc	Inc	Inc	Inc	Inc	Free - 24X7
Authorize.net	$0.00 - $99.00	$10.00 - $50.00	Included or 250 Free Transactions 10¢ Excess	Inc		Extra	$9.95	$10.00	Inc	Inc	Inc	$20.00	Free - 364 days
Payflow Link	$179.00	$19.95	500 Free 10¢ Excess	$19.95		Extra	$49.95	$9.95					$159.00 Monthly 13X7 $495.00 Premium 24X7
Payflow Pro	$249.00	$59.95	1,000 Free 10¢ Excess	$19.95		Extra	$49.95	$29.95					$159.00 Monthly 13X7 $495.00 Premium 24X7
First Data Global Gateway	$0.00 - $200.00	$10.00 - $50.00	Inc	Inc	$8.00 Monthly plus 8¢ per Transaction	Extra	$8.00 Monthly plus 9¢ per Transaction	Inc					Level I Support: 24X7 Level II Support: M-F
Yahoo® Payment Gateway	$0.00	$29.96 - $224.96	.75% - 1.5%	Inc									Free - 24X7

Unfortunately some of the items we listed could not easily be found on the electronic payment gateways' websites.  We tried to contact them but we did not receive a response by the time of this post. 

You can see from a quick glance that fee wise Quantum Gateway appears to be the best buy as it has no fees.  As a starting point it should be noted that all of these gateways have comparable integration with billing systems and shopping carts, detailed reports and processing controls. The differences are in the type of fraud prevention and detection that they offer.  Another example if ThreatMetrix (Fighting Fraud with ThreatMetrix).  This service is compatible with most electronic payment gateways and if you switch to another gateway, your settings can easily be transferred.

Comparing Electronic Payment Gateways

Monday, August 09, 2010

Years ago, we wrote an article Electronic Payment Gateways Compared.  We still stand by our professional opinion that no one can write an article comparing the electronic payment gateways unless those gateways are being used.  And when that article was written, I hate to admit it, but we were still using the LinkPoint (aka First Data Global Gateway) as an electronic payment gateway.  We stood by them when First Data decided to re-build the gateway from the bottom to the top.  We were promised more options to help reduce chargebacks - that did not happen.  We stood by them when they renamed LinkPoint to the First Data Global Gateway, once again being promised options to help reduce chargebacks.  And of course, that promise was broken as well.

Fortunately, we came to our senses and found a better electronic payment gateway named the Quantum Gateway.  This gateway was built with the Internet merchant in mind.  Preventing chargebacks was on the top of the list.  Chargebacks cost everyone money, thus increasing fees to the merchant account providers, the merchants, and finally the consumers.

Quantum Gateway

Unlike most other electronic payment gateways that charge a monthly fee or maybe even a transaction fee, the Quantum Gateway does not.  That's right, you read it correctly, they do not charge a monthly fee or a transaction fee.  They off a virtual terminal, batch uploading, virtual checks, and a virtual terminal accessible via a WAP enabled phone.

More Security Features

Unlike most other electronic payment gateways, the Quantum Gateway does not charge the merchant for storing credit card numbers.  Storing credit card numbers is risky on the Internet, but if you use the Quantum Gateway to help store the credit card numbers, this helps to take away a lot of that risk.  You can also use the Quantum Vault for recurring billing. 

Besides Address Verification Service (AVS), the Quantum Gateway has also added:

• Dial Verify - a system that automatically will call the customer during the checkout process, thus verifying the phone number.  You can use default recordings or upload your own recordings.  If you need a professional voice talent, we recommend Lynn Brooks.
• MaxMind - a scoring system to help you decide if the transaction needs to be vetted more, approved, or declined.
• Verified by Visa / MasterCard Secure Code - this system will help prevent some chargebacks based on the merchant's location, consumer location, and card association

We made the change to the Quantum Gateway and we suggest you do the same.  They offer a test account so you can implement it before signing up as an Internet merchant.  We say this because we noticed about eighteen months ago, the LinkPoint gateway seemed to stop offering free test accounts, even though they still say it on their website.  We have made numerous attempts at getting a free test account from the LinkPoint gateway, Authorize.net / Cybersource, and the Quantum Gateway.  The Quantum Gateway was the quickest when we applied for a test account, with Authorize.net coming in a close second.  However, we never did receive a test store from the LinkPoint gateway.

First Data is laying off employees while the Quantum Gateway is growing.  So, what are you waiting for?  Check out the Quantum Gateway and get a merchant account today.

Relying on Recurring Billing

Friday, April 17, 2009

A recurring monthly payment from customers can be a good source of income.  There are thousands of businesses that could thrive on using an electronic payment gateway to do recurring billing for them.  The electronic payment gateway would store the consumer's credit card number for you and complete the transaction at a set interval that you determine.

LinkPoint / First Data Global Gateway

The LinkPoint Gateway (also known as YourPay, but now known as the First Data Global Gateway) has their feature that is called periodic billing.  Through their API, you can set up a recurring monthly payment.  By doing this, you do not need to worry about storing credit card numbers and a possible breach.  You also save the Address Verification Service (AVS) fee on each recurring transaction, since the gateway has performed the service already. 

The LinkPoint Gateway however is somewhat limiting on its features.  For example, if the recurring transaction fails the next month, you are sent an email.  Unfortunately, it is then up to you to either contact the consumer to get a new credit card and possibly suspend the consumer's account.  However, you can also set up the recurring transaction to try for a couple of days - just in case the consumer was close to his limit and a payment was received to the card association.  Keep in mind though, each transaction will cost - a transaction fee, and this is usually $.15 - $.30, depending on your monthly volume and transactions.  On the plus side, the periodic billing feature is free and is available to all merchants that use the LinkPoint / First Data Global Gateway.

Quantum Gateway

The Quantum Electronic Payment Gateway is a fairly new product from CDG Commerce.  The gateway seems to pick up where a lot of the electronic payment gateways stop when it comes to recurring billing.  With their API, you can store the customer's credit card number on Quantum's secure web server and bill the credit card at a later time.  This comes as the e-commerce industry is trying to be more secure.

Developers can also apply for a test account to help mimic real world transactions.  For any new business that is considering a safe and secure method for securing credit card numbers, they should look at the Quantum Gateway.  However, this does not make you exempt from the Payment Card Industry Data Security Standard (PCI DSS).  With the API from the Quantum Gateway, there is no need for merchants to store the credit card number on their web server - all the information needed for the transaction is stored securely in the Quantum Vault.

The other electronic payment gateways and Internet Payment Service Providers (IPSPs) all offer some version of recurring billing but I don't think you will find one that is comparable to the Quantum Gateway.  As the Internet grows and more business models are online, most of the electronic payment gateways have grown stagnant as far as development.

Application Programming Interface - API

Saturday, April 14, 2007

Each gateway will offer an API to process transactions on your secure website. One of the many benefits to using an API to consistency. When checking out, the consumer does not notice any difference in the layout of your website.  The consumer is able to enter his / her credit card information on your secure website.

Quantum Payment Gateway

Unlike most of the other electronic payment gateways, the Quantum Gateway is one of the few electronic payment gateways that does not charge a transaction fee or a monthly fee.  The API can handle pre-authorizations, sales, recurring billing, and returns.  The Quantum Gateway API will allow the merchant to choose to store the credit card number in a secure manner on Quantum's servers, allowing the merchant to do recurring billing if necessary - simplifying your PCI DSS complaince.

The Quantum Gateway does not charge a fee for transactions.

Fraud Prevention

The Quantum Gateway offers basic fraud protection services (AVS, CVV2 / CVC2 / CID, IP Blocking) at no additional charge.  Advanced protection services (VBV / MSC, MaxMind GeoIP, DialVerify) at no additional charge.

Technical Support

The Quantum Gateway offers free merchant support 365 days a year at no extra fee.

LinkPoint API

LinkPoint's product is called LinkPoint API.  They will provide you a free store to use to test the functionality of your script.  The LinkPoint API module can handle sales, returns, real-time authorizations (pre-authorizations), and it will automatically set up recurring charges if needed.  LinkPoint does not charge a transaction fee for its services.  LinkPoint also does not charge a fee for its recurring billing product.

Technical Support

Level One technical support is available with 24-hours a day, seven days a week through a toll free number (888-477-3611). Level Two support is available Monday - Friday from 9 a.m. - 6 p.m. Pacific time.

Fraud Prevention

The LinkPoint gateway offers basic fraud protection services (AVS, CVV2 / CVC2 / CID, IP Blocking) at no additional charge.  Advanced fraud measures, like VBV / MSC is about $8.00 a month and 8¢ a transaction.  They also have something called Fraud Flex Detect that is proprietary.  They charge about $8.00 a month and 9¢ a transaction.

Authorize.net

Authorize.net Advanced Integration Method (AIM) is their API product. Authorize.net currently just released their periodic billing module as well.  They still charge about $19.95 a month.  They also charge $19.95 to use their Customer Information Manager.

Fraud Services

Authorize.net offers Advanced Fraud Detection Suite for $9.95 per month.

Technical Support

Authorize.net's technical support is opened only Monday - Friday from 6:00 a.m. To 6:00 p.m., closing January 1st and December 25th. Technical support's phone number is can be reached at 877-447-3938.

Paypal Payflow

Paypal bought the Payflow gateway from Verisign in 2006, but it kept it's name. Payflow calls its API Payflow Pro.  The Payflow Pro allows you to do sales and pre-authorizations.  Payflow charges $.10 per transaction after 1,000 transactions is reached each month.  Payflow Pro also offers other features as well like recurring billing, fraud support, and technical support. Payflow recurring billing is $39.95 to set up and $29.95 a month to maintain this service.

Fraud Services

Payflow offers a basic and an advanced fraud protection. Their basic plan will allow you to catch high dollar amounts, check for suspect IP addresses and ZIP codes, watch for address mismatches, and repeat buying.  The advanced plan offers everything with the basic plan plus rapid card use, and whitelisting of current customers.  There is a set up for of $29.95 for the basic plan and $89.95 for the advanced plan.  The monthly rate is $19.95 a month for basic plan and $49.95 a month for the advanced plan.  There is also a transaction cost as well - $.05 per transaction for the basic plan and $.10 per transaction for the advanced plan.

Technical Support

Technical Support is available through monthly plans.  They offer a 13X7 Enhanced Support for $159.00 monthly and 24X7 Premium Support for $495.00 a month.

Similar Articles: Comparison of Fees and Options for Six Payment Gateways and Comparing Electronic Payment Gateways

Electronic Payment Gateway-The Start of a Transaction

Saturday, January 20, 2007

An electronic payment gateway, like Quantum Gateway, Authorize.net, LinkPoint, Payflow, is the virtual connectivity between your website and the credit card companies.  These gateways will offer an API (Application Programming Interface), a secure website where you can actually direct your consumers over to process credit cards, and virtual terminal where you can actually enter credit card information to process (i.e. if you had a customer call you to place an order via the telephone).  

When the customer hit submits, the electronic payment gateway goes into action.  It sends the request to a transaction processor or platform (i.e. First Data).  First Data will then authorize or decline this transaction if they have the authority or sends it over to the acquiring bank.  The acquiring bank then sends it to the card association who takes the transaction and sends it to the issuing bank.  The issuing bank then authorizes or declines the transaction and sends the response back up the chain through the card association, to the acquiring bank, to the transaction processor, to the electronic payment gateway and then finally the response is displayed to the consumer. 

Each gateway will offer a fraud protection product.  The Quantum Gateway offers merchants the best fraud protection tools at no charge.  And the Quantum Payment Gateway is actually free to merchants.

Once the merchant gets the notification from the electronic payment gateway of a successful transaction, the merchant can begin shipping the goods to the consumer.  A batch is usually automatically ran at night and this will complete the transaction.  Batching the transaction will actually get the ball rolling for the merchant to get his / her money.  Up until this point, no money has been moved into the merchant's bank account.  For more information, please see How Does a Credit Card Transaction Get Processed.

Electronic Payment Gateways Explained

Saturday, January 14, 2006

An electronic payment gateway is the virtual connectivity between your website and the credit card companies (e.g. Visa, MasterCard, Discover, American Express, JCB, Diner's Club). It is similar to the point of sale (POS) terminal that you find in the grocery store or restaurant.

In the United States, there are a number of them: Quantum Gateway, LinkPoint, Authorize.net, Verisign's Payflow, Cybersource, Itransact, etc.

Authorize.net is probably the most advertised electronic gateway. A lot of people think they can sign up with them and immediately start to accept credit cards. They do not realize you need a merchant account as well. Authorize.net even uses the First Data platform to help facilitate transaction processing. Since we started using Authorize.net in September 2003, they have been down about seven times. This meant thousands of dollars lost in sales for merchants around the United States. Authorize.net's prices are usually about $15-$25 a month and each transaction is about $.10-$.15 in addition to the transaction charge imposed by the merchant account provider. They also charge $25 a month for recurring billing.

The LinkPoint payment gateway is probably one of the most deprecated electronic payment gateways out there. It is owned by the First Data Corporation. First Data has been doing electronic money transfers since 1969 and they were the first processor of both VISA® and MasterCard® bank-issued credit cards in 1976. First Data processed 12.2 billion transactions in North America alone in 2003. The last time the LinkPoint gateway went down was in January 2002. LinkPoint's charges are usually about $15-$25 a month. No other fees are charged, except for LinkShield. Recurring billing is free and no other transaction fees are imposed.

Verisign also has a payment gateway. Verisign is probably the most recognized name because they also offer other services and products for the internet (i.e. SSL certificates, domain registration, hosting, etc). You do not need to purchase everything from Verisign to have a successful e-commerce business. Verisign's prices are a little more than the others. They charge extra for their API and recurring billing.

The above gateways offer both an API and a secure website to capture your consumer's credit card data. An API allows you to capture credit card data on your secure website & process the transaction. The consumer never leaves your website and you maintain consistency throughout your website. If you wish to use the gateway's secure website, there is usually some simple HTML coding to direct your consumer over to that webpage. Once processed, they will be re-directed back to your website.

Using an Internet Payment Service Provider (IPSP) (like 2CO, Paypal, CCAvenue) means you have to use their own proprietary gateway. This helps to stay in compliance with Visa and MasterCard. This also means that your customers will be directed over to the third party processor's secure webpage. Some will allow you to co-brand this page (your logo and theirs on the page), but the consumer must know who they are paying and this page must state that.

Electronic Payment Gateways Compared

An electronic payment gateway is the virtual connectivity between your website and the credit card companies (e.g. Visa, MasterCard, Discover, American Express, JCB, Diner's Club). It is similar to the point of sale (POS) terminal that you find in the grocery store or restaurant.

In the United States, there are a number of them: Quantum, LinkPoint, Authorize.net, Verisign's Payflow, Cybersource, Itransact, etc.

Authorize.net is probably the most advertised electronic gateway. A lot of people think they can sign up with them and immediately start to accept credit cards. They do not realize you need a merchant account as well. Authorize.net even uses the First Data platform to help facilitate transaction processing. Since we started using Authorize.net in September 2003, they have been down about seven times. This meant thousands of dollars lost in sales for merchants around the United States. Authorize.net's prices are usually about $15-$25 a month and each transaction is about $.10-$.15 in addition to the transaction charge imposed by the merchant account provider. They also charge $25 a month for recurring billing.

The LinkPoint payment gateway is probably one of the most deprecated out there. It is owned by the First Data Corporation. First Data has been doing electronic money transfers since 1969 and they were the first processor of both VISA® and MasterCard® bank-issued credit cards in 1976. First Data processed 12.2 billion transactions in North America alone in 2003. The last time the LinkPoint gateway went down was in January 2002. LinkPoint's charges are usually about $15-$25 a month. No other fees are charged, except for LinkShield. Recurring billing is free and no other transaction fees are imposed.

Verisign also has a payment gateway. Verisign is probably the most recognized name because they also offer other services and products for the internet (i.e. SSL certificates, domain registration, hosting, etc). You do not need to purchase everything from Verisign to have a successful e-commerce business. Verisign's prices are a little more than the others. They charge extra for their API and recurring billing.

The above gateways offer both an API and a secure website to capture your consumer's credit card data. An API allows you to capture credit card data on your secure website & process the transaction. The consumer never leaves your website and you maintain consistency throughout your website. If you wish to use the gateway's secure website, there is usually some simple HTML coding to direct your consumer over to that webpage. Once processed, they will be re-directed back to your website.

Using an Internet Payment Service Provider (IPSP) (like 2CO, Paypal, CCAvenue) means you have to use their own proprietary gateway. This helps to stay in compliance with Visa and MasterCard. This also means that your customers will be directed over to the third party processor's secure webpage. Some will allow you to co-brand this page (your logo and theirs on the page), but the consumer must know who they are paying and this page must state that.