By: John Conde

September 21st, 2005

Reader Rating: 9.5

So you're starting your own ecommerce Website? Good for you! But you have many decisions to make. Do you write your own shopping cart or use an existing one? Who should be your merchant account provider? Who will deliver your goods? With so many decisions, you hardly have time to sort through all the information you'll need to know in order to make the best choice for your business.

One of the most important decisions you'll face is to choose a gateway to handle your credit card payments. The well-known Authorize.net may spring to mind, but is it really the best option for your business? In this article, we'll take an in-depth look at some of the popular gateways and explore the ins and outs of the services they provide.

What is a Gateway?

In short, a gateway connects your ecommerce Website to your merchant account.

The gateway facilitates online payments by connecting your secure order form with your specific merchant account at a processing bank. The gateway takes the submitted form data and presents it to the processing bank. When it receives a response from the bank, it presents that return data to the site of origin for appropriate handling.

The gateway itself doesn't provide ecommerce features such as shopping carts, Web hosting, or merchant accounts, although, as you'll see, many larger gateway providers do offer additional services like these.

Criteria for Comparison

Before we can compare gateways, we must decide on the criteria we'll use. To keep this assessment relevant and concise, I'll limit my comparison to three factors:

1. Available features


2. Cost


3. Reliability

One of the greatest concerns for all parties involved in an ecommerce transaction is security. Not only is your sensitive information kept on file, but your customers' personal information passes through your gateway every day. This information is of considerable value to hackers, so it must be protected. So, when you choose a gateway provider, you must be confident that security is the provider's number one priority.

That said, this review won't assess the security offered by the various gateway providers we consider. All the gateway providers we'll consider house their operations in state-of-the-art datacenters, and use the latest security methods to keep data safe.

The gateways we'll review are fully compliant with the security initiatives put forward by the major credit card providers, including the Visa Cardholder Information Security Program (CISP), MasterCard Site Data Protection (SDP), and Discover Information Security and Compliance (DISC). If you decide to user a lesser-known gateway provider, you should verify that the service is compliant with all those initiatives. If it's not, you could end up paying higher fees, having your account closed, and possibly having your organization added to The Match File, a credit card processing blacklist.

Features

Most online merchants don't realize that their gateway may offer many more features than the ability to accept credit cards through an online form. The truth is that most gateway providers offer value-added features that either make the merchant's life easier, or help to increase your revenue streams. Here are some of the more common features.

Virtual Terminal

Let's say you receive a call from a customer who has questions about a product on your Website. You answer her questions adequately, and she decides she wants to purchase the product. Do you tell her to go back to your site to place their order? Well, you can. But why risk that customer never completing her purchase, when you can take her order right there, over the phone? You can process the customer's credit card payment on the spot, using a virtual terminal!

A virtual terminal is a Web form that's accessible to the merchant, and allows you to enter credit card payments manually. It can also be used to issue returns and void previous transactions.

Fraud Prevention

Fraud prevention tools are probably the most important, yet under-utilized, feature offered by the major gateways. Merchants whose stores have been online for over six months will have been introduced to chargebacks [1], and will probably have first-hand experience of their negative effects. One of the main causes of chargebacks for online transactions is fraud. Utilizing the fraud prevention tools offered by your gateway provider will allow you to spend less time dealing with chargebacks, and more time making sales and promoting your business.

The gateways discussed here support the basic fraud prevention tools. These include Address Verification (AVS), which compares the customer's delivery address with the address that the card-issuing bank has on file, and CVV2, the three-digit security number that appears on the back of VISA, MasterCard, and Discover Card credit cards (a four-digit number on the front of American Express cards).

Recurring Billing

Merchants who charge their customers on a periodic basis will find the recurring billing feature offered by many gateways a big time-saver. Using recurring billing, you can simply provide your gateway with billing information, and tell it how often to charge the customer -- the gateway takes care of the rest. There's no more keying information into a piece of software or credit card terminal every month! This feature is great for subscription and membership based businesses.

eCheck Processing

Although credit cards are, by far, the most popular way to pay online, other payment options shouldn't be ignored. After all, your goal is to make it as easy as possible for customers to part with their money. Electronic checks (eChecks) are an increasingly popular payment method that allows customers simply to enter their banking information, rather than physically send a check by mail.

Integration

Though it's perhaps not a true "feature," integration is still worth considering when you're choosing a gateway. Should you make your checkout process completely transparent to customers? Are you a programming "newbie" who wants a simple set-up that you know will work? Or are you waiting to switch to a more advanced set-up when you have the time and experience? Having the option to choose the integration method without incurring any extra costs can help you avoid headaches during the setup process, and as you manage your business's growth in later months.

Cost

As with any merchant account service, fees are associated with using the gateway -- fees that are separate from those billed by your merchant account provider. Luckily, gateway provider's fees are a fairly standard, which makes comparison easy. These are the most significant:

• Setup fees: These fees are charged when you first establish your gateway (before it's built), and are generally non-refundable. These costs may vary from hundreds of dollars to absolutely nothing.
• Monthly fees: As with most merchant account services, gateway providers charge a monthly fee for their service. This fee is usually independent of monthly processing volume.
• Transaction fees: Most providers charge for every transaction they process, regardless of whether the transaction has been approved or declined.
• Additional Features: Generally, gateways charge for any additional features you might decide to use. Charges may include set-up fees, monthly fees, and transaction fees that are separate from the standard charges above.

Reliability

On the Web, it seems that one second equals an eternity. Every online merchant knows that if they can't process a transaction when their customer's ready to buy, the sale is lost. Why would customers wait around for a problem to be resolved when they can go to a competitor's site and make their purchases right now? The last thing you want is a third party service failing when you need it most. Your gateway must be up and running 24-7.

The Gateways

So, now you know what to look for in a gateway. Many providers will vie for your attention: who will you consider?

I've researched some of the more popular gateways; I'll break down their features, costs, strengths and weaknesses. Here are the contenders:

• Authorize.net
• Verisign Payflow Pro
• Verisign Payflow Link
• LinkPoint API
• LinkPoint Connect
• Plug 'n Pay

Some of these gateways offer different features -- charge different prices -- depending on which method of integration you choose to use. I've listed each of these offerings separately, classifying each as its own, unique product for the sake of easier comparison.

Authorize.net

Authorize.net [2], founded in 1996, has become synonymous with the word 'gateway'.

Features

Fraud Prevention

The Authorize.net Fraud Detection Suite (FDS) is designed to identify fraudulent transactions before your product ships (and you're hit with a chargeback). The suite's features include:

• an amount filter that sets upper and lower value limits for "acceptable" sales
• a velocity filter that limits the number of transactions that can be received per hour from a given customer
• an address mismatch filter that detects instances in which billing and shipping addresses differ
• an IP filter that isolates suspicious activity from one IP address
• a suspicious transaction filter based on Authorize.net's own criteria
• IP blocking functionality, which allows you to block the IP addresses of known frauds

Recurring Billing

This is straightforward: supply your customer's credit card details, billing amount, payment interval, the length of the subscription, and a recurring billing account is created. No further interaction is required.

eCheck Processing

The Authorize.net eCheck system is robust and full-featured, with many capabilities. Any merchant who's considering processing eChecks will find Authorize.net's solution an excellent choice.

Choice of APIs

This is one of the strongest features of Authorize.net: merchants are able to choose between two different integration methods for the same price. You can switch methods at any time, and all features are available regardless of which method you choose.

The available integrations methods are:

• The Simple Integration Method (SIM): Not surprisingly, this is easiest method to set up, with virtually no programming, and no SSL certificate, required. Your secure order page is hosted directly on Authorize.net's secure server, but it can be customized to match the look and feel of your Website.
• The Advanced Integration Method (AIM): This method allows programmers to make the checkout process completely seamless and transparent. Customers never leave your Website, as transactions are conducted server-to-server, behind the scenes. This method gives you complete control over the front-end, and your customers' experience of your site.

Cost

Authorize.net doesn't list service pricing on its Website because it doesn't sell directly to merchants. Interested merchants need to contact one of the authorized resellers listed in the directory [3].

Pricing varies by reseller, but here are some rough guidelines:

• Set-up fee: Set up costs range from $25 to $300 (the average being $100). This fee usually does not include recurring billing or other value-added services. Some resellers allow you to reduce the setup fee if you agree to pay a higher monthly fee.
• Monthly fee: Monthly fees can range from $10 to $30 per month, averaging $15. This fee covers processing statements and the provision of merchant support.
• Transaction Fee: In addition to the transaction fee charged by your merchant account provider, Authorize.net will charge an additional transaction fee of its own. This fee will vary from 5 cents to 15 cents, with 10 cents being average. Some resellers have the ability to offer free transactions, as Authorize.net rewards active resellers by allowing their merchants to process their first 250 transactions each month for free. If you expect to make fewer than 250 transactions per month, you can essentially avoid transaction fees if you use a reseller that offers this discount.
• Recurring Billing: Authorize.net's recurring billing feature is not a standard feature: it incurs additional cost in the form of a set-up fee and a monthly recurring fee. Setup fees run from $40 to $100, with $50 being average. The monthly fee will range from $20 to $40, with $30 being average.
• Fraud Detection Suite: Authorize.net's Fraud Detection Suite also incurs additional setup and recurring fees. The setup fee ranges from $25 to $50, with $40 being average. The monthly costs vary depending on volume. If your business conducts no more than 100 transactions each month, your cost will be between $8 and $20, with $13 being average. If your business conducts between 101 and 1000 transactions, the FDS will cost between $15 and $50, with $30 being average. If your business conducts over 1,000 transactions each month, you'll be looking at a range of $50 to $150 per month, with $100 being average.
• eCheck: eCheck services through Authorize.net are handled differently then their other services. Pricing is not set by resellers. However pricing will still vary from merchant to merchant as Authorize.net sets it rates on a case-by-case basis with fees being determined by the risk associated with the account. However, most merchants typically pay a $49 application fee and if approved a $100 setup fee. Each check process will cost 1.75% of the check's face value plus 30¢ per transaction. There is no monthly fee but $10 monthly minimum does apply.

Strengths

Although Authorize.net resellers can charge virtually any price they wish, pricing for this provider's gateways and services remain relatively low. This is due to two factors:

1. Low buy rates: Authorize.net has excellent buy rates from which resellers can mark up their services both competitively and profitably.


2. Competition: So many companies resell Authorize.net's services that pricing needs to remain low: reseller competition is fierce!

The features Authorize.net offers (recurring billing, fraud detection, and eCheck) meet the needs of virtually every merchant. Such a comprehensive offering eliminates the need to implement third party solutions, and makes managing the services easy.

Authorize.net does not consider one form of integration superior to another, so it offers customers both. New Webmasters will find this feature particularly attractive, as they may not yet have the programming skills to implement the Authorize.net gateway through its available API, but want to have the option to do so in the future, once they acquire those skills.

Authorize.net's popularity is of benefit to many of its users. If you look at the features offered by most of the currently available shopping carts, almost every one offers built-in support for Authorize.net right out of the box. In fact, many shopping cart and ecommerce solutions list support for Authorize.net among the software's features. In these cases, unless you're writing a custom shopping cart for your site, you don't have to worry about integrating your Authorize.net gateway: it's already been done for you. If you've chosen to write your own custom shopping cart, you'll find that developers have released the source code that accesses Authorize.net's AIM API, making application development much quicker and easier.

Weaknesses

As popular as Authorize.net's services are, they are not perfect. Being the largest payment gateway provider does have its downsides.

The first notable issue is that pricing can vary tremendously from one reseller to another. If your goal is to get the lowest rates possible, you'll need to shop around quite a bit. Unfortunately, you may also be inundated with merchant account offers, as the vast majority of resellers are very interested in landing lucrative merchant accounts. Some will even refuse to establish a gateway for you unless you use their merchant services.

As the largest payment gateway provider, Authorize.net is often targeted by hackers. In September 2004, Authorize.net was the target of a Distributed Denial of Service attack (DDoS) that lasted for almost a full week, preventing some merchants from processing sales, and others from being able to sign up for new services. It wasn't the first attack Authorize.net has experienced, and it's not likely to be the last. Granted, any business could have been targeted (in fact, 2checkout.com was attacked at the same time), but it's fair to say that being number one in the payment gateway industry also means being number one on the hackers' hit list.

Verisign Payflow Pro

The Verisign [4] name is well-known, and carries a reputation for security and trust. It has carried its reputation for security from its SSL certificate issuing to its gateway services.

Features

Recurring Billing

The Payflow Pro recurring billing feature is pretty standard, but does offer a very useful feature: an API (application programming interface) from which a recurring billing profile can be created. So, for example, you can have your Website automatically create a recurring billing profile for you during a customer's online registration. For Web hosting or other subscription-type services where new users sign up through your site, this can be quite a time-saver.

The Payflow Pro gateway also is capable of sending out automated custom emails. You can send your customers email receipts for their records or send them a notice that their card was declined and that they need to make new payment arrangements for failed transactions. Reporting is also available for billing transactions and individual customer profiles.

Fraud Prevention

Verisign breaks its fraud prevention services into two different packages; each has add-on features that enhance the level of protection.

The Basic Package includes seven basic filters that help reduce a merchant's exposure to fraud. The filters included are:

• High dollar value filter
• High item number filter
• Shipping/billing mismatch filter
• AVS failure filter
• CSC failure filter
• High risk zip code filter
• Freight forwarder filter

You can also restrict sales to certain IP addresses. In essence, you create a whitelist of valid IP addresses from which purchases are permitted.

The Advanced Package includes all of the Basic Package's filters, plus another fifteen filters that increase protection:

• Product watch list filter
• High risk BIN filter
• Account number velocity filter
• US Postal Service address validation filter
• IP address risk list match
• Email service provider risk list match
• Geo location failure
• Bad list filter (credit card and e-mail address)
• High risk country filter
• International shipping/billing address filter
• International IP address filter
• International AVS filter
• Good email list filter
• Good credit card list filter
• Total purchase price floor filter

Verisign offers an interesting feature in Account Monitoring. Essentially Verisign employees monitor your sales looking for suspicious transactions. If they notice one, they investigate it to determine whether the sale is truly legitimate or fraudulent. If the sale appears to be fraudulent, they prevent that sale from being settled, and contact you to discuss the transaction further. To use this feature, you must already be registered with the Basic or Advanced Fraud Prevention Packages.

Lastly, Verisign offers a Buyer Authentication program for merchants who wish to utilize Visa's Verified by Visa and/or MasterCard's SecureCode technologies. To use this feature, you must already be registered with the Basic or Advanced Fraud Prevention Packages.

Cost

• Setup Fee: Verisign charges a one-time fee of $249 before account setup.
• Monthly Fee: Verisign charges a hefty $59.95 monthly for the service.
• Transaction Fee: Each transaction run through Payflow Pro costs 10¢ in addition to your merchant account fees. However, the first 1,000 transactions each month are free. Since the vast majority of merchants don't do that kind of volume, this pricing structure virtually eliminates transaction fees for most merchants.
• Recurring Billing: If you decide to use Payflow Pro's recurring billing feature, you'll incur a $39.95 setup fee, and a recurring $29.95 monthly fee.
• Fraud Protection: As described above, Verisign offers quite a few tools for fraud detection and prevention, but charges separately for them. The basic package costs $29.95 to set up, and an additional $19.95 per month plus 5¢ per transaction (these charges are not included in the free transactions). The advanced package costs $89.95 to set up, plus $49.95 per month and 10¢ per transaction (these charges are not included in the free transactions). Account monitoring costs $29.95 to set up and $19.95 per month. If you wish to use Verified by Visa or MasterCard SecureCode, you'll incur a $150 setup fee, as well as a $9.95 monthly fee plus 10cents per transaction. In summary, if you wish to use all fraud prevention tools provided by Verisign, you will incur $260.90 in setup fees, $79.85 in monthly fees, and at least an additional 20 cents per transaction.

Strengths

Verisign's fraud prevention tools are second to none in terms of flexibility and power. With so many ways to review transactions for potential fraud in one system, it's hard to imagine many fraudulent transactions slipping through. Merchants who have been troubled by chargebacks and fraud in the past would find these tools a great relief.

As an ecommerce merchant, if your Website is down -- even for a minute or two -- your nearest competitor is only a click away. While other gateways have experienced issues with datacenter moves and hacker attacks, the Verisign gateway has been consistently reliable, with only one outage in recent memory.

Thanks to the SSL certificate business from which this gateway started, the Verisign name has been known for years as the secure and reliable brand on the Internet. At the very least, merchants feel comfortable using Verisign's services, and customers feel reassured by the Verisign logo. Although it's debatable whether Verisign is more secure then other gateways, many Webmasters and customers trust this brand.

Weaknesses

As I mentioned, the Verisign name is well known and carries with it a reputation of security and trust. And they make you pay for it. Payflow Pro is easily the most expensive gateway available. With a $249 setup fee, you could pay more to become a Payflow Pro customer (before you even receive your login information or make a sale) than you would for an entire year with other gateways, setup fee included! Verisign's $59.95 monthly fee for basic features would buy you every available feature on many other gateways.

Although Verisign's fraud detection tools are robust, they're also expensive. I found it disappointing that this provider broke its features down into four different categories and charged for each of them separately. Each one costs a significant amount, and combining them would double the cost of an already expensive gateway.

Verisign Payflow Link

The little brother of Payflow Pro, this gateway still carries Verisign's reputation for security and reliability.

Features

Recurring Billing

Unlike its more robust Payflow Pro brother, Payflow Link does not offer an API through which you can set up new recurring billing profiles. All recurring billing profiles must be set up manually through a control panel.

Payflow Link includes the same email and reporting capabilities as Payflow Pro. See Payflow Pro for more information.

Fraud Protection

The fraud protection tools available for Payflow Link are the same as for Payflow Pro. See above for more information.

Cost

• Setup Fee: Verisign charges a one time fee of $179 before account setup.
• Monthly Fee: Verisign charges a reasonable $19.95 per month for service provision.
• Transaction Fee: Just like Payflow Pro, each transaction run through Payflow Link costs an additional 10¢ on top of your merchant account fees. However, the first 500 transactions each month are free. Few merchants will process more than 500 transactions per month, so this structure virtually eliminates the transaction fee.
• Recurring Billing: If you decide to use Payflow Pro's recurring billing feature, you'll incur a $14.95 setup fee, and a recurring $9.95 monthly fee.
• Fraud Protection: The fraud protection tools available for Payflow Link are the same as for Payflow Pro. See above for more information.

Strengths

See the strengths of Payflow Pro above.

Weaknesses

Like its big brother, Payflow Link is expensive. Considering its limited integration capabilities (detailed below), you can end up paying a lot of money for relatively little service. In this case, I believe that you're almost certainly paying for the Verisign name.

Unlike Payflow Pro, Payflow Link does not allow you to make the checkout process transparent for your customers. You must send all customers to Verisign's Website, where your secure order form resides. Although this will save you money on an SSL certificate -- as you don't have to host the secure order page -- the Web address shown in your customer's Web browser will not be your own. This can be seen as a negative factor by customers deciding whether or not to complete a purchase, and can result in abandoned shopping carts.

A "hidden" weakness that most merchants don't notice is that Payflow Link does not support Level two or three business cards. When a merchant accepts certain special credit cards, additional information about that card needs to be sent to the processor. If you fail to send these details, higher fees are usually charged for that sale. If your business were to use Payflow Link and accepted business credit cards through its Website, you'd pay the highest possible fees for those sales, as Payflow Link doesn't support those types of cards. Verisign does specify the lack of support for level two and three business cards on its Website, but, due to most merchants' lack of merchant account knowledge on the topic, this fact usually goes by unnoticed.

LinkPoint API

LinkPoint International [5] is a wholly owned subsidiary of First Data Corporation, the giant in the merchant services industry. The LinkPoint brand is the gateway arm of the First Data merchant services portfolio. Their LinkPoint gateway comes in two flavors: LinkPoint API and LinkPoint Connect. The LinkPoint API is the "advanced" way to process sales through LinkPoint.

Features

Recurring Billing

LinkPoint API provides recurring billing; billing periods can be set to daily, weekly, monthly, and custom intervals.

Fraud Protection

LinkShield, LinkPoint's fraud protection service, uses a feature called "risk rating" to determine if a sale is potentially fraudulent. There are three options for implementing LinkShield. Option 1 uses a behavioral approach: it learns from transactions and makes predictions based on what it has learned over time. Option 2 uses statistical data: it basically compares the sale against a database of previous successful and fraudulent sales, and tries to determine which it kind of transaction it resembles most. Option 3 uses a combination of both methods.

Note: At the time this article was written, this service was only in a Beta testing phase.

Tax Calculation

An interesting feature of the LinkPoint API is its tax calculator, which calculates sales tax by state and municipality. It allows merchants to determine how or when customers are charged sales tax for products and services they've ordered.

Shipping Calculation

A common need for merchants who ship tangible products is the calculation of shipping costs for each order. This feature will calculate shipping costs based on zones, or the type of shipping used. It can provide flat rate pricing, or base shipping costs on the total value of the sale.

eCheck

LinkPoint's version of eChecks, called VirtualCheck, is feature-rich and should satisfy the vast majority of merchants. Funds are deposited directly into a merchant's business checking account within five to seven business days. Merchants are notified of returned checks within two to four business days, and those checks are automatically resubmitted. Email notifications and real-time reporting are also included.

Cost

LinkPoint does not sell its services directly to merchants. A merchant who wishes to utilize the LinkPoint API payment gateway will need to contact one of its authorized resellers. As a result, pricing will vary by reseller.

Since definitive pricing cannot be given, I'll provide here the general price ranges you can expect.

• Setup Fee: Establishing a LinkPoint API gateway costs anywhere from $75 to $300; $295 is average. It is possible to get a reduced setup fee by paying a higher monthly fee, but this offer varies by reseller.
• Monthly Fee: Monthly costs for the LinkPoint API will run anywhere from $15 to $25, with $20 being average.
• Transaction Fee: The LinkPoint API does not charge a transaction fee.
• Recurring Billing: Unlike the other major gateway providers, the recurring billing feature is included with the LinkPoint API at no extra charge. There is no additional setup fee, monthly fee, or transaction fee.
• Fraud Protection: When LinkShield goes gold it should cost approximately $25 per month.
• eCheck: VirtualCheck has no setup fee, a $10.00 monthly fee, 2.00% discount rate and a 25 cent transaction rate.

Strengths

The LinkPoint API's greatest strength is, clearly, its pricing. Although some resellers do charge a fairly high setup fee, that charge can be recouped if you never pay transaction fees. That extra five or ten cents per transaction can add up quickly, and the lack of transaction fees with this offering can easily more then compensate for the high setup fee. If a merchant plans to use the recurring billing feature, the costs saved just in monthly fees alone can tip the scale for a price-conscious merchant.

With the exception of its recent move to a new datacenter, the LinkPoint API has experienced virtually no downtime in recent years. Eventually, LinkPoint plans to have a backup datacenter in place for redundancy.

Weaknesses

The biggest drawback to the LinkPoint API is that it's proprietary to one processing platform: First Data. The best way to explain this is to compare it with computer operating systems. Software written for Windows won't work on Mac or Linux. They use different architectures and therefore communication with each OS is handled differently. The same concept applies to Visa and MasterCard processing networks. There are over a dozen in existence, and they each have a different API with which they communicate with gateways (and credit card terminals).

LinkPoint, which is owned by First Data, communicates only with First Data's platforms, so you must sign up with a merchant provider who has access to the First Data platforms. Many do; many don't. Limited choices mean that you have a limited opportunity to find a program that best suits your business. This can get really ugly if you're using the LinkPoint API, and try to leave your current provider. If you choose a new provider that doesn't have access to the First Data platform, you will need to learn a new API for your new gateway, then reintegrate it into your shopping cart (not to mention that you will have to learn your way around your new gateway). The purpose of this approach, as with any proprietary software, is to "lock" a merchant in.

Another big drawback of LinkPoint is its lack of a powerful anti-fraud offering. With fraud being a huge concern for every online merchant, you'd expect that fraud-prevention tools would be an essential feature for any gateway. Although an anti-fraud solution is in development, it's not here now, and, when it does launch, will possibly be limited in comparison to the anti-fraud tools already in existence with the other gateway providers.

LinkPoint Connect

The LinkPoint Connect gateway essentially is a stripped-down version of the LinkPoint API. It's similar to Authorize.net's SIM and Verisign's Payflow Link in terms of the way it's integrated with your site.

Features

LinkPoint Connect does not offer any special features such as recurring billing or fraud prevention.

Cost

• Setup Fee: Establishing a LinkPoint Connect gateway costs between $75 and $300, with $295 being average.
• Monthly Fee: LinkPoint Connect will run anywhere from $15 to $25; $20 is average.
• Transaction Fee: LinkPoint Connect does not charge a transaction fee.

Strengths

Just like the LinkPoint API, LinkPoint Connect charges no transaction fees.

The lack of features of LinkPoint Connect, while listed as a weakness below, can also be considered an advantage. Many merchants do not want bells and whistles, or functionality other than the ability to accept credit cards online through a secure order form. The simplicity of LinkPoint Connect removes the distractions that additional functionality may provide some merchants.

Weaknesses

LinkPoint Connect is proprietary to the First Data platform. See the downsides of the LinkPoint API for more information.

As with Verisign's Payflow Link, LinkPoint Connect merchants cannot make the checkout process transparent for customers: they must send customers to LinkPoint's Website, where the secure order form resides. See Payflow Link for information.

LinkPoint Connect offers no built-in anti-fraud tools. See the downsides of the LinkPoint API for more information.

Although the functionality of LinkPoint Connect is limited, its price tag is not. Most resellers charge the same price for LinkPoint Connect as they do for the LinkPoint API. While LinkPoint Connect customers can switch to the LinkPoint API at any time, and at no cost, if they don't plan to take advantage of its additional functionality, you're basically paying for gateway services you'll never use.

While ideal for very small businesses with no plans to grow or expand, LinkPoint Connect's lack of features limits its appeal. Any business wishing to start with LinkPoint Connect's basic card processing functionality, then grow to include other services, will need to switch to the LinkPoint API first before they can take advantage of those services. If Webmasters have limited programming skills, they may find this is not possible, or can only be done with great difficulty or expense.

Plug 'n Pay

Plug 'n Pay [6] attempts to take the gateway to the next level by positioning its services as a complete business management system. Indeed, Plug 'n Pay offers many services to compliment the basic gateway service.

Features

Fraud Prevention

Plug 'n Pay offers two different levels of fraud protection. The first level is called FraudTrak, which offers a feature called Negative Database: an in-house database of known fraudulent customers and credit card numbers. As Plug 'n Pay members report violators, the database continues to grow.

The second level of fraud protection is called FraudTrak2. It offers more advanced features for reducing fraud, including:

• IP Blocking
• Block Email Domains – Many fraudsters use free email providers (e.g. Hotmail, Yahoo, AOL) as their email for fraudulent purchases. You can block users from making a purchase using free email addresses from these domains.
• Bounced Emails – If your customer's order confirmation email bounces, you'll know before you ship your product.
• Block Country – Some countries are hotbeds of fraudulent activity. You can block purchases from such countries with the click of the mouse.
• IP Address Frequency Check – Sometimes fraudsters will repeatedly enter credit card numbers into your system until they find one that works. This tool will place a limit on how many purchase attempts a user can make from one location.
• Credit Card Number Frequency Check – Once a fraudster finds a successful stolen credit card number, they will use it until it is finally exhausted. This service will identify a card that has been used repeatedly, and block it from use.

eCheck Processing

Plug 'n Pay's eCheck processing handled by a third party, so customer billing is separate from your regular billing through Plug 'n Pay. However, all eCheck reporting is done through the Plug 'n Pay control panel, which makes organizing your online sales easier.

Recurring Billing

Recurring billing is limited. Recurring billing accounts can only be set up manually, and only for monthly increments. Managing accounts is easy to do through the recurring billing interface.

Membership Management

Membership management takes recurring billing to the next level. This feature allows you to offer a "members only" section to your Website, manage the access levels, password protect it, manage those passwords, manage the length of subscriptions, and automatically create a recurring billing account. It also allows monitoring of the content within your members' area. If someone is determined to download an excessive amount of content, you will be notified. Security measures, such as IP monitoring, are in place to prevent users from sharing accounts.

Digital Downloads

Managing digital downloads is a headache for ebook authors. How can you provide a link to your product without having your customers email it to everyone they know? How do you verify that your customer did actually download the entire ebook? With Digital Download Delivery of course! With Digital Download Delivery you get:

• Vanishing URLs – access to the URL disappears after a set period of time (usually two hours)
• Download Verification – confirm your product has been delivered successfully to your customer (very helpful in reducing chargebacks)
• Virtually any file format is supported

Affiliate Management

The Plug 'n Pay affiliate management tool enables merchants to sign up and manage a network of affiliates. The tools offered to help make affiliate management easier include:

• Separation of shipping and tax from the total sale, to make commission calculation easier
• Tracking of banner impressions, click throughs, and sales to determine which banners work best
• Allowance for affiliates to track their own results
• Provision for affiliates to sign up directly

Coupon Management

An interesting feature offered by Plug 'n Pay is the ability to issue and track coupons. You determine the offer you want to make and, when your customers make a purchase, they enter the code you've supplied, and your special offer is redeemed right then and there. The Plug 'n Pay system knows the discount you have offered, and will apply it when your customer submits their order. You can run multiple promotions simultaneously, and set an expiration date as you would for a paper coupon.

Shopping Cart

If you are having difficulty finding a shopping cart that supports Plug 'n Pay (which isn't likely, since the largest shopping cart providers support Plug 'n Pay either by default or with a plugin), simply use the Plug 'n Pay shopping cart. The cart is hosted by Plug 'n Pay, so no SSL certificate is required. Additionally, the gateway is automatically integrated into the shopping cart. You can even customize the HTML template to have the shopping cart more closely match your Website.

QuickBooks Integration

As any QuickBooks user can tell you, getting data from your online sales into QuickBooks is quite a chore. Unless you establish a merchant account through QuickBooks, you're forced to enter your daily sales manually, one at a time. That is, unless you use the Plug 'n Pay gateway. It offers an automated process to import your sales directly into QuickBooks as either Invoices or Cash Sale receipts.

Choice of APIs

Plug 'n Pay provides a choice of integration methods. You can choose to the simple WebXpress HTML method, which utilizes a form on the Plug 'n Pay server, so you don't need to worry about installing your own SSL or communicating with their gateway. Or, you can use the Plug 'n Pay API, which provides complete control over the checkout process. You can switch back and forth between these methods at any time, and every feature that's available through the API is also available through WebXpress HTML.

Training

Not really a feature per se, but still worth noting, is the fact that Plug 'n Pay holds merchant training every Monday through Friday to teach new merchants how to integrate their new gateways into their Websites. The staff member walks you through the process step by step, from beginning to end. Best of all, they do it for free.

Cost

The Plug 'n Pay gateway can be purchased directly through Plug 'n Pay, or from an authorized reseller. The figures below outline the Plug 'n Pay direct pricing. Except where noted, it's safe to assume that reseller pricing will be equal or higher than the figures provided.

• Setup Fee: To start using Plug 'n Pay, you must first pay a $295 set up fee. Some resellers do offer lower pricing for this: it can cost anywhere from $50 to $295 to sign up through a reseller.
• Monthly Fe: On a monthly basis, it costs $20 to maintain the gateway; this is on par with other providers.
• Transaction Fee: Each transaction processed through the gateway costs10 cents. However, the first 200 transactions are free.
• Fraud Prevention: Plug 'n Pay's basic FraudTrak fraud prevention is free and included with the basic service. FraudTrak2 is optional and costs $195 to set up, an additional $15 per month, plus 15 cents per transaction.
• Digital Downloads: The handy digital download feature is as pricy as it is effective. It costs $490 to set up and 25 cents per transaction, although the first 100 transactions are included. However, there is a $25 monthly minimum, which means that if you don't incur at least $25 in transaction fees through the recurring billing feature, Plug 'n Pay will charge you up to $25 to make up the difference between the monthly minimum and your actual incurred fees.
• Recurring Billing: Automatic recurring billing is costs a whopping $590 to set up, incurs a $30 monthly minimum, and 30 cents per transaction. However, the first 100 transactions are included, and there is no monthly fee.
• Membership Management: Plug 'n Pay continues its theme of high set up fees by charging a $690 set up fee for membership management, along with a $35 monthly minimum, and 35 cents per transaction (the first 100 transactions are included).
• eCheck Processing: To accept online checks through Plug 'n Pay costs $145.00 up-front, plus $12.50 per month. The company will also take a small percentage of each check's value. Your cost will be 1.50% of the face value of the check, plus a 45 cents transaction fee. Returned checks cost $4.00 each.
• Affiliate Management: To manage your affiliates, you'll incur a $195 set up fee, plus an additional $25 per month.
• Coupon Management: To offer coupons to your visitors, you will incur a $195 charge upon set up, plus $20 per month.
• Shopping Cart: Use of the Plug 'n Pay shopping cart will cost you an additional $15 per month. However, some resellers avoid charges to set up their merchants with the shopping cart, and may pass that saving on to you. Shop around!

Strengths

The sheer number of available services offered through Plug 'n Pay is astonishing. With features such as digital download management, membership management, and affiliate management built in to the Plug 'n Pay system, it's easy for merchants to find a tool that will benefit their businesses. There's no need to use a third party and, because it's already integrated into the gateway, no extra work is required to implement the feature into your store.

Plug 'n Pay gives merchants two methods by which they can integrate the gateway into their sites. You can choose from their easy-to-implement WebXpress HTML option, or the more advanced API. Either way, you get the same feature set and availability of services, and can switch your implementation at any time.

Weaknesses

Although Plug 'n Pay offers a robust selection of services, the functionality comes at a steep cost. The digital download service is exactly what ebook authors need to manage their sales and reduce theft, but unfortunately, the $490 setup fee is often prohibitive to would-be Plug 'n Pay customers. The $590 setup fee for recurring billing eliminates any benefit the service might have offered. Although the other services average $200 to establish, combined with the $295 setup fee Plug 'n Pay charges to establish the gateway, a merchant is looking at spending at least $500 before they can accept a single credit card.

Choosing Your Gateway

At first glance, it may seem as though all these gateways are alike and you should base your decision on price alone. But, as we've discovered above, the differences between gateways can vary tremendously, and can mean that one gateway is a better choice than another for your business.

How can you decide which service is right for you? First, you need to determine your needs and prioritize them. Once you know what's most important to you, the facts will make your decision easy.

The Cost-conscious Webmaster

Owners of new businesses typically do not have large sums of money to dedicate to their ventures. In fact, a shoe-string budget is quite the norm. When every penny counts, setup fees, monthly fees, and transactions fees all loom large in the decision making process. The chart below provides a quick reference as to the basic costs associated with each gateway.

The "I Need Features" Webmaster

Do you plan on being more than just a typical merchant who simply sells and ships a product? Would you like to offer memberships or digital downloads? If so, you might find some of the features offered by particular gateways to be very beneficial. Below is a chart that identifies the features offered by each gateway.

The "Keep-It-Simple" Webmaster

Not every Webmaster is an expert programmer. Trying to integrate a gateway through its API can be extremely challenging and, for some, even impossible. This chart outlines which gateways offer an easy-to-implement system, and which are more complex.

Conclusion

Through this article, we've explored several aspects of gateways, and discussed how you can choose one that's best suited to your business. We've seen how we should compare them, reviewed the offerings from some of the more popular providers, and provided information for easy comparison between them.

Hopefully, this guide has given you a clearer picture of where each gateway stands in the big picture, and has helped you to understand how you can determine which offering best suits your needs.

Appendix – Other Gateways

Don't limit yourself to researching and comparing the six gateways I've mentioned in this article. There are many gateways to choose from: one of them might be exactly what you're looking for. Here are some more popular gateways to consider:

• ANZ eGate [7]


• BluePay Gateway [8]


• Concord EFSNet [9]


• CyberCash [10]


• CyberSource [11]


• Innovative Gateway [12]


• iTransact [13]


• NobelPay [14]


• PayFuse [15]


• PayGateway [16]


• Paymentech Orbital Gateway [17]


• Pay Me Now [18]


• PSiGate [19]


• QuickCommerce Pro [20]

[1] http://www.sitepoint.com/articles/chargeback-challenge
[2] http://www.authorize.net
[3] http://www.authorize.net/solutions/merchantsolutions/stateresellerdirectory/)
[4] http://www.verisign.com/
[5] http://www.linkpoint.com
[6] http://www.plugnpay.com/
[7] http://www.anz.com/anzegate
[8] http://www.onlinedatacorp.com/aboutbluepay.asp
[9] http://www.concordefsnet.com/
[10] http://www.cybercash.com
[11] http://www.cybersource.com
[12] http://www.innovativegateway.com/
[13] http://www.itransact.com
[14] https://www.nobelpay.com/
[15] http://www.fnms.com
[16] http://www.paradata.com
[17] http://www.paymentech.net
[18] http://www.paymenow.com
[19] http://www.psigate.com
[20] http://www.ecx.com