Fire Damages Data Center for Authorize.Net

July 3, 2009 — Authorize.net, a payment gateway service provider for over 238,000 businesses was the victim of a major fire in the early morning hours Friday at its location in Seattle resulting in a major disruption for online retailers.

Approximately 11 a.m. central time, Authorize.net set up a twitter account to keep its customers and their customers up to date on the outage and attempt to provide some information about the expected return to service.
The company confirmed that the fire had not only damaged the primary data center, but that a secondary data center seemed to have been impacted during the outage and was causing additional problems in getting the gateway back up.

authorize.net twitter

Many online articles refer to authorize.net as a credit card processor. They are not. They provide a gateway service that enables merchants to accept online payments. However in 2007, they were acquired by Cybersource, an electronics payments company. So while Authorize.net is not a merchant processor, their parent company is.

A merchant has an ecommerce store using Authorize.net as the gateway and Chase Paymentech for payment processing. What happens if the settlement times are both set up for the same time at 6 PM? How long before the merchants bank account is funded?

MERCHANT QUESTION: I noticed that the settlement times on Authorize.net and Chase are set to 6pm. Does that mean a batch going from authorize.net to chase will be delayed a day because of transit time? Should Chase be set to a later time?

ANSWER: No. The settlement time at Chase Paymentech was initially set up when the merchant was using the Orbital Gateway for it’s ecommerce store. However the merchant changed ecommerce software; there was an API written for Authorize.net, but not the Orbital Gateway, offered by Chase Paymentech, for the new software.

Authorize.net is now doing the batch, not Chase. The batch setting that counts is auth.net. Settlement is per schedule. The merchant is funded 48 hours, 6 days per week.

Below is an example daily email the merchant receives from authorize.net:
The following is your Credit Card settlement report for Tuesday, May 05,
2009. This merchant has funds deposited in 48 hours, or 07-May-2009 for the batch shown below.

Dear customer:
The following is your Credit Card settlement report for Tuesday, May 05,
2009.

Transaction Volume Statistics for Settlement Batch dated 05-May-2009
21:27:45:
Batch ID: 9———-6
Business Day: 05-May-2009
Net Batch Total: $———.80
Number of Charge Transactions: —55
Amount of Charge Transactions: $——–.80
Number of Refund Transactions: 0
Amount of Refund Transactions: 0.00

To view details for a specific transaction, please log into the Merchant
Interface.

1.Click “Reports” from the main menu
2.Select “Transaction Details by Settlement Date”
3.Select “Settled Transactions” from the Item Type drop-down box.
4.Select the Settlement Date for the batch you would like to view from
the “Date” drop-down box
5.Click “Run Report”
6.In the results, click on any transaction ID to view specific details
for that transaction.

If you have any questions regarding this settlement report, please
contact your bank or you can call Customer Support at 1-877-447-3938.

Thank You,
Authorize.Net

This is the information sent to a friend for a credit card processing account:
AUTHORIZE.NET VIRTUAL TERMINAL
No cost for set up
$5.00 a month
2.20 % per transaction
or
2.84 % per transaction if security info is missing
.20 per transaction
No Cancellation Fee
1 week to set up

What’s wrong with this offer?
Authorize.net does not provide payment processing. They are a gateway only.

Some Payment processors provide virtual terminals, including the ones I represent. For straight credit card processing (not recurring billing), the authorize.net solution would be an extra layer since you would pay for a gateway, and then for the processor. There is no exception- authorize.net does not and will not process credit cards.

RECOMMENDATION: Pass! Without examining rates, the representation is incomplete at best and I don’t recommend doing business with anyone who doesn’t provide full disclosure until after the fact. All the true details would come out later after the ‘initial paperwork’ is done.

Note: Authorize.net does have a virtual administration, but the processing is not done by them so the contract must be with a different party. I personally have access to the Authorize.net administration as both a reseller and as an account user. As a reseller, I can set up accounts on demand, and set the rates the merchant will pay, adding on some profit to my fixed costs if desired.