1- Create a test account on Authorize.net (https://developer.authorize.net/testaccount/)
2- On successful signup you will see following info, save them at safe place.
- API Login ID
- Transaction Key
3- Login to your Magento Admin panel and navigate to
- System -> Configuration -> Payment Methods
- Expand Authorize.net
- Insert “API Login ID” and “Transaction Key” into this form and make other settings as shown below
6. Save Configuration and you are DONE!