ecommerce, Uncategorized

Authorize.Net vs. NMI: Comparing and Contrasting Payment Gateways

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November 01, 2022

If you’ve decided to take online payments, you’ve likely come across articles about or talked to salespeople that reference payment gateways, including Authorize.Net or NMI.

They may have even suggested a specific gateway, such as Authorize.Net or NMI. Or perhaps you’re currently using one of those gateways but are considering a switch. In this article, we’ll compare and contrast Authorize.Net and NMI, two of the most popular gateways available, to help you make the right decision.


Key Terms

In order to effectively compare Authorize.Net and NMI, it’s important to understand a few key terms:

Credit card processor / merchant services provider / reseller: This is the company that facilitates credit card acceptance for your business. This is not the same company as the payment gateway provider. Authorize.Net and NMI are not credit card processors.

Payment gateway: The payment gateway is the “equipment” used to process online payments.

Payment gateway provider: This is the company that provides payment gateways. Both Authorize.Net and NMI are payment gateway providers.

Merchant account: This is the account that you open with a credit card processor when you begin accepting credit cards.

Payment gateway account: This is a different account that you open with the payment gateway provider when you begin using that gateway to take online payments.

With those terms in mind, let’s take a closer look at these companies and their gateways.

About Authorize.Net

Authorize.Net is a major player in the credit card processing world.

Owned by Visa, the company was founded in 1996 and has processed billions of online transactions for businesses in a variety of industries. The company boasts that it has a customer base of close to 500,000 businesses, making it the leading payment gateway.

About NMI

Founded in 2001, NMI provides the NMI gateway to credit card processors to resell to businesses.

The company’s website lists a customer base of close to 150,000 businesses and processes more than $68 billion in payments.

Key Differences Between Authorize.Net and NMI

There are two big differences between Authorize.Net and NMI. The first is that NMI does not sell directly to businesses. If you want to use NMI’s gateway, you need to go through a third-party reseller. Authorize.Net also sells through third-party resellers, but you can go direct if you prefer.

The second difference is essentially an extension of the first. Because NMI doesn’t sell to businesses, it provides “white labeling” to credit card processors, where they can sell the NMI gateway under their own name / brand. For this reason, you may find processors that are selling their “own” gateway, with its own name, but it’s really the NMI gateway.

White-labeling is a common practice in business-to-business sales and is not a negative, but is worth mentioning as it provides context for why you may not see as much about NMI in reviews or online. In some cases, businesses don’t know that they’re using NMI.

In addition to these broad differences, there are several smaller variations between the two gateways. NMI focuses heavily on being a holistic payment gateway that offers solutions for all the ways you take payments, including online, in-person, by mobile device, through recurring billing / subscriptions, etc. While Authorize.Net technically does enable in-person payments, it hasn’t been as much of the company’s focus and thus has fewer solutions for doing so.

Let’s take a look at services both companies offer, and some of the key services provided.

Features and Services

Both Authorize.Net and the NMI gateway allow you to securely accept credit cards and electronic checks. Both are considered “universal” gateways, meaning they work with many different credit card processors rather than locking you down to one merchant services company.

While both have a focus on enabling online payments, they each have solutions for in-person transactions, including through mobile devices for business owners on-the-go. For mobile payments, both Authorize and NMI are compatible with mobile readers that work with Apple and Android devices. NMI also works with some Ingenico and Verifone countertop devices for in-person payments.

Authorize.Net Features

It’s one of the most popular payment gateways for a reason. Authorize.Net has plenty of features for different business types, ranging from single-item sales to recurring billing with account updating.

Customer Information Manager for Repeat Customers and Subscriptions

Do you serve a lot of repeat customers? Authorize.Net’s card on file solution lets customers keep their details securely stored while providing a quicker checkout process. The customer information manager (CIM) function stores billing details for multiple cards as well as shipping information to eliminate the need to re-enter data for every purchase. The information is stored on Authorize.Net’s servers, not yours, ensuring compliance with PCI requirements.

The CIM also provides recurring / subscription billing solutions for businesses that need to charge customers on a regular schedule. You can set up dynamic pricing and payment schedules or offer trial subscriptions for customers that are on the fence.

For an additional fee, Authorize.Net offers account updater to ensure that recurring billing transactions are less likely to be declined. Account updater checks for the latest cardholder data, ensuring that when cards expire, new details are provided for seamless continuation of subscriptions. The additional fee only applies to accounts that have had changes and therefore need to be updated. You won’t be charged for accounts that are checked if no updates are needed.

Single-Item Sales and Donations

For specialty businesses, marketing and selling one item is often the way to go. Authorize.Net provides easy solutions with simple “buy now” buttons that don’t require extensive set up. Or, if you’re running a non-profit or other organization that needs to accept donations, you can quickly set up a “donate now” button instead. You’ll customize your button, receive HTML code that is generated automatically, then copy-and-paste the code into your website.

With either button, buyers simply go to a secure payment form hosted by Authorize.Net – ensuring you get paid and your customers’ info stays safe.

Invoicing

Service businesses and other companies that need to invoice rather than rely on buy-now buttons or online shopping carts can take advantage of Authorize.Net’s convenient invoicing solution.

You can customize invoice emails to include your logo and preferred font for consistent branding, and automatic email reminders can prompt customers about their unpaid invoices. An included invoicing dashboard provides access to review your invoices, filter by invoice status, or search by invoice number.

Be sure to check out our Authorize.Net Gateway review for additional details or to read customer reviews.

NMI Features

Many of the same services that Authorize.Net offers are provided by NMI. The company offers invoicing, card storage, an account updater for subscription billing, and fraud prevention. Where NMI branches out from Authorize.Net is that it offers more choices for in-person payment. As noted previously, Authorize does have in-person options, but they tend to focus on mobile readers or using a computer as a point of sale terminal. NMI, on the other hand, has more options.

In-Person Payments

NMI is compatible with some models of countertop terminals (including popular Verifone and Ingenico machines) making it a more flexible choice for businesses that take payments in different ways. You won’t be restricted to using a mobile reader with a smartphone or using your computer as a point of sale system.

Multiple MIDs

Merchant Identification (MID) numbers are used by processors when they issue a business a merchant account. In some cases, it may be beneficial to have multiple MIDs that can use one device or payment gateway account. For example, a business with several locations may all have individual MIDs but the headquarter location needs to be able to use one main account for all locations. Or a business that has independent contractors renting space (such as a salon that rents out individual chairs/workstations) may have an MID and the contractor will have their own MID.

With multiple MID capabilities, both parties could use the same equipment / gateway account, simply utilizing their own MID to actually process the transaction. This eliminates the need for extra gateway accounts. The NMI MID routing solution makes it easy to manage multiple MIDs.

NMI’s Authorize.Net Emulator

One of NMI’s biggest draws for businesses that already use Authorize is the Authorize.Net emulator. Since Authorize.Net has been around for so long, many businesses have used it at some point and have programmed their websites and payments technology specifically for the Authorize.Net gateway.

To make it easier to switch, NMI offers an Authorize.Net emulator. Essentially, it “emulates” the Authorize.Net gateway, eliminating the need for you to make a bunch of complex programming changes. You can switch to NMI while keeping your payment process the same. This makes it easier for staff and customers since there is no functional outward difference in accepting payments.

Be sure to check out our NMI gateway review for more information.

Enhanced Data

For corporate or government transactions, an important consideration is “enhanced data,” also referred to as Level II or Level III Data. Businesses that provide enhanced data with transactions may qualify for lower costs than businesses that don’t. This topic is complex enough that we’ve covered it already in other articles, so we won’t go over it all again here.

Both NMI and Authorize.Net support enhanced data. However, other solutions may be easier to use when it comes to B2B transactions. Due to the extra information required, options that can auto-populate required fields can make it easier to provide enhanced data and ensure you’re not missing any important details.

If you process a lot of commercial cards or government cards, give us a call to talk about how you can choose the best enhanced data solution for your needs.

High Risk Businesses

If your business is considered “high risk” – whether due to the industry, a history of chargebacks, or factors outside of your control – you’ll need to choose a gateway and processor that can work with high risk businesses. Fortunately, both Authorize.Net and NMI can work with many high-risk businesses.

It’s important to be upfront with the credit card processor you’re considering if you’re a high-risk business. Once they have more information, they can provide insight into which gateways will be the best fit and the most stable for your business. After all, you don’t want to choose a gateway only to have your account closed a few weeks later.

Ecommerce and Shopping Cart Integration

Both Authorize.Net and NMI are compatible with multiple e-commerce platforms and popular shopping carts, including:

  • WooCommerce (works with WordPress)
  • Volusion
  • Magento
  • Wix
  • BigCommerce
  • 3D Cart

Authorize.Net integrates with Shopify, but NMI does not. However, it’s worth noting that Shopify heavily pushes businesses toward using its own Shopify Payments solution and it may not be cost-effective to utilize other options.

Pricing

When it comes to pricing, where you obtain your gateway plays a big role. With Authorize.Net, you have the choice of going direct or going through a reseller. NMI only provides its gateway through resellers; you can’t go directly to NMI to sign up.

Authorize.Net Direct Pricing

If you choose to go directly to Authorize.Net for both your merchant account and payment gateway, you can expect the following fees:

  • Monthly gateway fee: $25
  • Per-transaction fees: 2.9% + 30 cents

Note: Fees listed come directly from Authorize.Net’s website and are subject to change. Some businesses may not be eligible for this pricing, while others may negotiate better rates.

This puts Authorize in line with “flat rate” pricing companies like Stripe and Braintree. For some businesses, that may be a competitive rate. For many others, it’s on the higher side. As we wrote about previously, many business owners can actually get lower Authorize.Net fees by not going through Authorize.Net.

If you already have a merchant account and choose to just use Authorize.Net as the gateway provider, you can expect the following fees:

  • Monthly gateway fee: $25
  • Per-transaction fee: 10 cents
  • Daily batch fee: 10 cents

These fees will apply on top of the merchant account fees from your merchant services provider.

If you process more than $500,000 per year in credit card sales, Authorize.Net will provide custom pricing.

NMI Pricing

Since it is not possible to go direct to NMI to obtain the gateway or a merchant account, it’s not possible to list the fees. All rates and fees will be set by the credit card processing company, not by NMI. Rates reported online vary, with some credit card processors advertising $10/month starting costs and others saying $25. You’ll need to request a quote from a compatible processor in order to get real estimates on costs to use the NMI gateway.

Reseller Pricing

There are thousands of resellers in the credit card processing industry and many of them sell both Authorize.Net and NMI gateways. It won’t be difficult to find a processing company that can set you up with either gateway.

While the actual costs vary greatly, you can usually expect a per-transaction fee and a monthly fee. With both NMI and Authorize.Net, you may incur fees for:

  • Recurring / subscription billing
  • Using a virtual terminal
  • Integrating with QuickBooks
  • Advanced fraud protection

Be sure to get a complete schedule of fees and review it carefully. It’s also a good idea to compare credit card processors before committing to a gateway.

The Bottom Line

Both NMI and Authorize.Net have plenty of helpful features to enable secure online payments. They both integrate with multiple popular shopping cart and ecommerce platforms. If you’re looking for a more complete solution, including in-person payments, NMI has an edge. If you’re looking for online payments with the stability of the dominant gateway, Authorize.Net wins out.

Have you used these gateways? Let us know which you prefer in the comments section!

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Ben Dwyer

BY Ben Dwyer

Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing. As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.

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