Stripe vs Authorize.net: Difference and Comparison

Buying and selling products and services has found a home online, and these processes are now called e-commerce. However, regarding the payment portion of these transactions, one gets two options, Cash On Delivery (CoD) and Online Payment.

Usually, people go for the latter to prevent any hassles and smooth deliveries.

Several countries help facilitate and execute the procedure of online payments so that the seller does not need the technical expertise or knowledge to create a payment gateway of their own. Two of the biggest players in this industry are Stripe and Authorize.net. 

Key Takeaways

  1. Stripe and Authorize.net are online payment processing services used by e-commerce businesses to accept customer payments.
  2. Stripe offers a simpler integration process and has more modern features like built-in fraud prevention, while Authorize.net has been around longer and is more established.
  3. Stripe offers lower fees for credit card transactions, while Authorize.net has a wider variety of payment options and can be a better choice for businesses that process high volumes of transactions.

Stripe vs Authorize.net

Stripe and Authorize.net are both payment processing services. Stripe focuses on online payments, providing a more modern, user-friendly platform. Authorize.net, on traditional credit card processing service, Authorize.net has been in business longer and has stronger and established contacts with banks and financial institutions.

Stripe vs Authorize.net

Comparison Table

Parameters of ComparisonStripeAuthorize.net
PriceStripe is a less expensive option.Authorize.net costs more than Stripe.
SecurityStripe has lesser security features than Authorize.net.Authorize.net is the more secure of the two.
SpeedStripe is slower than Authorize.net.Authorize.net has significantly higher speeds.
CustomizabilityStripe is highly customizable.Authorize.net is not as customizable as Stripe.
FlexibilityStripe does not allow third-party merchant accounts.Authorize.net allows third-party merchant accounts.

What is Stripe?

Stripe is a financial SaaS company that is based in San Francisco. The term SaaS stands for ‘Software as a Service’ and is used when the software is used to perform any operation; hence, the company provides service.

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The most popular service this company provides is payment gateways and Application Programming Interfaces (APIs). Their primary customer base includes e-commerce websites and similar businesses.

Stripe was created by two entrepreneur Irish brothers, John and Patrick Collison, in 2010. Stripe acquired Kickoff, a chat and task management application, in its starting days. Initially, they started in Palo Alto but then moved to San Francisco.

The main function of Stripe is to provide APIs that e-commerce web developers or other web developers who are building websites that involve transactions can use. These APIs serve as a payment gateway, facilitating money transfers from the customer to the seller.

Stripe had decided to enhance their security tools and features, and to do so, they released an anti-fraud tool called ‘Radar’ in April 2018 to detect and prevent fraudulent transactions.

Again, in 2018, the company made another leap towards expanding its service by making a billing product for online businesses. This is a very popular feature, as this helped businesses that have a subscription-based form of payment to use Stripe’s services as well.

Stripe has played its part in supporting startups too. In 2016, Stripe launched a service called Atlas. Atlas is a service that helps startups register as US Corporations.

Since they wanted to try out this product before launching the service to the open market, Atlas was initially an invite-only service. 

Stripe did not just stick to gateways and APIs. They also progressed further and offered users monetary services such as loans and credit cards.

Also, in October 2020, Stripe announced a new program called Stripe Climate, which helps businesses fund the research and capture of atmospheric carbon.

stripe

What is Authorize.net?

Authorize.net is a financial company that provides payment gateway services that helps e-commerce websites and online service providers to accept payments through various methods, such as debit card, credit card, online money transfer, etc.

Authorize.net was initially founded back in 1996 in Utah by Jeff Knowles. This company is now a subsidiary of Visa.

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One of the biggest benefits of Authorize.net is that it lets the users sign into their credit card and then shop and purchase items from any website they want and directly make payments. This is very convenient concerning other services, where one has to sign in each time to make a transaction.

Although the company now focuses a lot on security, however earlier, it has a history of a few major outages, which was probably what led the company to become more security-centric as it is right now. In 2004, they suffered a Distributed Denial of Service (DDoS) attack, which lasted for more than a week, and this led to a pause in payment operations and transactions of all its users.

Again in 2009, they had an outage where their whole web infrastructure crashed, and all systems went offline. At that time, they already had a huge user base, none of whom could process any payments of their credit cards.

However, now Authorize.net has taken many security measures and is reportedly even one of the best for payment gateway security.

authorize net

Main Differences Between Stripe and Authorize.net

  1. Stripe is cheaper than Authorize.net.
  2. Authorize.net has better security measures than Stripe.
  3. Authorize.net has faster processing speeds compared to Stripe.
  4. Stripe is comparatively more customizable than Authorize.net.
  5. Authorize.net allows third-party merchant accounts, while Stripe does not.
References
  1. https://books.google.com/books?hl=en&lr=&id=CtwvDwAAQBAJ&oi=fnd&pg=PR15&dq=stripe+payment&ots=ZTy9MKutnV&sig=uRUal0JjExzvvJYHmRJc4V7mXDM

Last Updated : 11 June, 2023

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23 thoughts on “Stripe vs Authorize.net: Difference and Comparison”

  1. I think it’s worth noting that Authorize.net allows third-party merchant accounts, which can be beneficial for certain businesses.

    Reply
  2. The section on Stripe’s support for startups through the Atlas program reveals the company’s commitment to fostering entrepreneurship.

    Reply
    • I agree, I think it’s a valuable resource for anyone looking to set up online payments for an e-commerce business.

      Reply
  3. It’s great to see how these companies are not just focused on payment gateways but also offer a range of monetary services.

    Reply

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