Accepting Credit Cards: Comparing Authorize.Net, Virtual Payment System, and PayPal

Credit cards are more convenient for clients and a more reliable way to get paid for lawyers. After struggling with PayPal for years, I recently shopped around for a professional card processing solution. I mainly looked at three options: Authorize.Net, Virtual Payment System, and PayPal Website Payments Pro.

(Spoiler: I chose Authorize.Net.)

Understanding credit card processing

What I found is that credit card processing is a complicated mess of components and fees. No matter who you choose, it’s hard not to feel like you are getting nickeled-and-dimed, because there are at least 8 potential fees for even a simple setup.

That said, credit card processing boils down to just two main components, each of which charges a monthly fee and takes a cut out of every transaction:

  1. The payment gateway is what you or your clients use to enter credit card information into the system. This can be a physical card reader, a form on your website, or a virtual terminal—basically a credit card entry form that you can use to enter a client’s credit card information yourself.
  2. The merchant account receives the money on its way to your firm checking account.

The total monthly fees were about $30 per month for all the services I looked at. The per-transaction charges include a flat fee plus a percentage of the amount charged. Both components vary by about 1% depending on which service you choose. I found 30–35¢ for the flat fee and 2.19–3.5% for the percentage. (The per-transaction charges get smaller if you do enough business by credit card, so if you expect a lot of payments, investigate the options.)

You also pay for any extra services you want. For example, I wanted recurring billing, since I have a number of clients on a monthly subscription plan. The cost of recurring billing in the options I looked at varied from an extra $10–30 per month.

My credit card processing requirements

What I need my credit card processing service to do is (1) allow clients to pay for some services online; (2) integrate with Freshbooks, my timekeeping and billing software so clients can pay with a credit card without leaving their invoice; (3) allow me to take payments by entering a client’s credit card information manually; and (4) recurring payments, preferably through Freshbooks.

Integration with Freshbooks, my timekeeping and billing software, is important to me because I want to do as much billing as possible through a single portal. That leaves quite a few options, however. In addition to PayPal, Freshbooks integrates with 9 other merchant services, 7 capable of recurring billing.

Initially, I just upgraded my PayPal account because it was the path of least resistance. However, I quickly realized that an upgraded PayPal account is a lot more money for not much more functionality.

PayPal didn’t meet my needs, so I took another look at the options. Of the merchant services that integrate with Freshbooks, only Authorize.Net provides detailed pricing information on its website, so that was what I looked at, first.


In addition to being up-front about its fees, Authorize.Net seems to be relatively popular among online merchants. Since that is the nature of the credit card processing I need to do, it seemed like it might be a good fit. It is also supported by Freshbooks, which makes billing smoother for me, since I can generate invoices and accept credit cards through a single, integrated portal.

I also liked that Authorize.Net didn’t make me call to find out more; I just filled out the application online, and got a call from a very nice sales representative who helped me understand the process and pricing. They also took care of arranging the merchant account, so I didn’t have to figure out how to do that and connect the account to the gateway myself.

Here is the cost breakdown for the services I signed up for:

  • Setup fee: $99
  • Monthly fee: $29.95 ($20 gateway; $9.95 merchant account)
  • Per-transaction fees: $0.35 + 2.19%
  • Recurring billing: $10/month

In other words, $99 to set up my account, then $39.95 per month, plus the per-transaction fees every time I run a card.

Connecting Authorize.Net to Freshbooks was a piece of cake, and my clients can click on their invoice, click on pay now, and pay me without leaving the invoice. I can also enter transactions into the virtual terminal at Authorize.Net, or generate web forms. It’s a very slick system, and makes it easier for me to get paid.

The only downside to Authorize.Net for lawyers is that it is not set up for trust payments. In order to do trust payments, you need a credit card provider who will deposit 100% of the payment into your trust account, and withdraw any fees from your regular firm checking account.

I don’t accept advances on fees often, so this wasn’t a huge problem for me, but it would be nice to have the option. That’s why I also looked at Virtual Payment System, which specifically advertises this functionality.

NB: If you go with Authorize.Net, realize that at some point during the signup process, you will sign up with another company that will handle part of the credit-card processing (PowerPay/E-OnlineData, in my case). If at some point you decide to cancel your Authorize.Net account, you will have to cancel with this other company separately, or it will keep billing you even though you are not getting any value from it. I can’t see any reason why Authorize.Net couldn’t do this for you, but then the other company wouldn’t get an extra month or two of your fees before you find out about it.

Virtual Payment System

I looked into Virtual Payment System mainly because it advertises easy credit card processing for trust accounts in our sidebar. However, VPS doesn’t publish its prices; it wants you to call for more information. Instead, I reached out to VPS and got its price sheet for comparison.

Assuming I understand the price sheet right, here is what I would pay with VPS:

  • Annual fee: $150 (includes $50 “PCI compliance & security scan”)
  • Monthly fee: $15
  • Per-transaction fees: $2 + 3.5%, but paid by your client
  • Recurring billing: included

If I have that right, VPS is significantly more expensive than Authorize.Net overall, but much cheaper for you, the merchant, because your client pays the transaction fees. That is also why VPS is compatible with advance fee payments. If you want to take advances that need to go into your trust account, VPS is the only legitimate option on this list.

So VPS presents an alternative. If you don’t like paying the merchant fees with every transaction, you can make your clients pay. Sounds like a good deal, as long as your clients don’t object.


PayPal has one enormous advantage over the other options: price. You can accept credit cards without paying a monthly fee, and if you use Freshbooks, Harvest, or any other company that has partnered up with PayPal, you can get the PayPal Business Payments transaction fee, which is just 50¢ per transaction—way less than the other options.

There are substantial downsides, though. PayPal’s website is a user interface nightmare, and based on my conversations with customer support, I get the impression the backend is just as bad. If you use the free version, your clients will complete their transaction at PayPal instead of right in their invoice (as with Freshbooks) or on your website. That means they have to try to navigate the PayPal website, which isn’t always easy. If you want to do automatic recurring payments with the free version, subscribers must have a PayPal account connected to their bank account; they can’t just use a credit card.

Upgrading to PayPal’s “pro” merchant services fixes some of these problems, but it is significantly more expensive than the competition. And you still have to use the same hard-to-navigate website. I did sign up for PayPal pro at first, and here are the costs I had to pay:

  • Setup fee: none
  • Monthly fee: $30
  • Per-transaction fees: $0.30 + 2.9% (or as low as 2.2% for transactions of more than $10,000)
  • Recurring billing: $30/month

In other words, nothing to set up my account, but then a whopping $60 per month, plus higher per-transaction fees every time I run a card.

Despite its significant shortcomings, PayPal a relatively easy, free way to accept credit cards. It just isn’t a very good wayto accept credit cards. If you want to accept credit cards more than just occasionally, go with Authorize.Net or VPS.

Closing the sale with a credit card

There are other ways of accepting credit cards, of course. Your bank probably has merchant services, and if you are using QuickBooks, you might want to look into Intuit’s merchant services. It probably pays to shop around more than I did, but if you want a quick, easy setup, go with Authorize.Net. I’m a happy customer so far.

On the other hand, if you want to accept trust account payments, consider giving Virtual Payment System a try and let us know how it goes.


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  • Gyi Tsakalakis


  • Joy Wilder

    A lot of my clients like for their credit card needs. Nice article!

    Joy Wilder

  • Ben Bunker

    Anyone have input on LawCharge? I’ve been using them and so far have been pleased. I was wondering if there are any other users around who may have comments.

  • Joseduddy

    I have a free square account. There is a per transaction fee but reasonable. Works on iPhone/iPad/Andriod and more. Access all transaction from a secure website. One down fall is. Three day transfer to your bank. Other than that it is fantastic.

    • Sam Glover

      Square and PayPal are about the same as far as fees, convenience, and customer service go (although Square has the nifty card reader). In other words, expensive, convenient enough, and questionable customer service. Once you are accepting a reasonable amount of fees via credit card, you are much better off with a real merchant account.

  • Mike Seidle

    Sam, you have the pricing for VPS right.

  • Karin Conroy

    I’m a big fan of the PayPal version that links in with my Harvest account. I love only paying $.50 per transaction with no setup fee so am willing to deal with the PayPal interface. However (as you mentioned) there is the huge caveat that it really isn’t a credit card payment option since it has to link to a bank account, so it’s more of an online payment method.

  • Kevin Houchin is critical to my flat-fee billing model. I’m sure others can do the same thing, but being able to set up automatic-recurring transactions is key. I also like the reporting I receive via email as transactions process and clear. The online terminal works great and I can give my book-keeper limited access so that she can pull the information she needs.

    I’ve done some checking around and know for a fact (at least a fact in my anecdotal study) that being able to accept credit/debit card payment VASTLY lowers both the outstanding receivables percentage and the time between billing and payment. I don’t have to hope for checks in the mailbox anymore because about 95% of my revenues are paid via credit/debit card. The processing fees are worth every penny.

  • Jeff Berman

    You can sign up for a merchant account through some of the larger banks (for instance, we use Chase for business checking) and use as the payment gateway.

    Often if you have a business checking account, you can get even better rates on your merchant services. Additionally,the transactions will process more quickly and funds will post to your account sooner when you have a checking account with the same bank.

  • Austin

    Thanks for your review. It was very helpful. I am a Freshbooks user too and need to decide who to use for auto bill transactions.

    • Sam Glover

      I use Authorize.Net for my merchant account, but if you connect it to Freshbooks, you don’t need to sign up for Automated Recurring Billing with Authorize.Net. Freshbooks will remember your clients’ credit card information and handle the recurring billing for you, and it works out to be cheaper than ARB with Authorize.Net.

  • Anthony Vrsecky

    Your evaluation of VPS mentions the problem of advance fees into trust. I don’t understand the problem to which you are referring. Please enlighten me. We have used a number gateways in the past and have recently switched to CC processing by our bank with assurances of the following: Any processing costs for funds deposited into trust are debited from the general operationg account. Likewise, any trust deposit charge-backs which we’ve never had one in over ten years of accepting CC’s, are debited from the general account. All CC deposits used to go into trust to avoid possible errors such as depositing costs into the general account. Now we are depositing earned fees directly into general and costs into trust which saves a lot of time needed to transfer fees between accounts.

    • Sam Glover

      The problem is as you noted — transaction fees must either come from another account or, as VPS handles it, be paid separately.

  • Jim Lee

    I think it is much cheaper to open a gateway with partners. Here is the cost breakdown for the services I signed up at

    Setup fee: $0
    Monthly fee: $15 ($5 gateway; $10 merchant account)
    Per-transaction fees: $0.20 + 2.1%
    Auth ARB Recurring billing: $10/month

    Quite similar to Paypal, I also use the Authorizenet Simple Checkout, which allows me to easily create a Buy Now button instantly, by generating a small script for facebook or invoice.

  • Patricia

    Thanks for writing this post! Very useful and I learned a lot.

  • Dale N

    Jim lee you got that right I signed up through an authnet reseller called merchantinc and got the payment gateway for 6.95 and the merchant account for $1 no set up fees or contracts and 1.99%

  • eCommerce pro

    Actually Paypal and PP Pro are about a light year (literally) ahead of any merchant account on the market when it comes to integration, tech, back-end design, and getting your cash faster. Its like an iPhone or Italian furniture, to be honest.
    Its like comparing Apple software to Microsoft ; sure MS is the most popular OS, but that’s how it usually is, isn’t it? _ more people can afford a GM SUV vs a Porsche Cayenne. This is not to say that GM cars won’t get you from A-to-B, or that Auth-NET won’t process your charges …!

    The real question is: what’s your Budget?

  • Jimmy The Gent

    I agree 100% with eCommerce pro, PayPal is light-years better than I’m an app developer and publisher and we’ve had many issues with our client apps that had as the payment interface. We’ve had ZERO issues with PayPal. We now use PayPal Here to make POS payments from clients when we close sales. No brainer.

  • fuzz

    Would love to see an update on this, especially since there has been some activity in this space. Does Stripe live up to its hype? Apparently, they have a customer service via email only policy, which I’m skeptical of.

    • Sam Glover

      We actually use Stripe for Sites, and it’s great. But Stripe is more of a payment backend then PayPal or It doesn’t offer a virtual terminal for you to directly enter credit card numbers, for example. It’s awesome if you’re using Freshbooks or Xero to let people pay their invoices, but it’s not great if you’re hoping to have someone hand you a credit card while sitting in your office.