The Boom of Payment Gateways and the Next Steps
More and more companies are starting to use payment gateway, what does this mean to the market of e-commerce and related industries? What does this mean for your company? And what should be the next steps?
What is Payment Gateway?
Payment gateway is a technology used by merchants to accept debit or credit card purchases from customers. In more simple terms, the “checkout” portals in online stores or the card-reading devices in physical stores act as a payment gateway where customers are then presented with multiple choices of payment options.
There are multiple reasons as why many businesses incorporate payment gateways to their system. Firstly, most retailers and firms are already using payment gateways. Thus, not having it in your own system may lessen your competitive advantage. Secondly, it can lessen frequency and severity of credit card fraud for both customers and retailers.
Why is it Booming?
According to Business Wire, the Payment Gateway market was valued at USD 17.2 billion in 2019 and is expected to reach USD 42.9 billion by 2025. Turns out, aside from the benefits of the technology, there are multiple trends that push the use of payment gateways. First, increased credit card frauds. Second, increased internet penetration and awareness; 5.3% increase from 2018 to 2019. Lastly, COVID-19.
Prior to the pandemic, people were seen to be slowly changing their behaviors, I.e., one that is more adept to internet usage. However, the forced adaptation to e-commerce, as in-person stores closed for quarantine, pushed people to evolve their behavior faster. Online retailers witnessed a 74% rise of transactions volumes in March 2020. This means, a 74% increase usage of payment gateways (in retail).
Most importantly, businesses are realizing how efficient the use of payment gateways are. Instead of building different interfaces for each different service such as Banks, E-Wallets, etc, payment gateways acts as the one interface capable of accessing all these different services. It is efficient and for customer, it's user-friendly.
Asia-Pacific region is to witness the fastest growth (Business Wire, 2020). Look at your friend beside you and ask them if they have bought something from an online store recently. Chances are, that person answered yet. You may have also bought something new recently. There is no denying that the adoption of online transactions is increasing rapidly in this region.
Now, what do you do as a company/business owner? You must take advantage of the moment. If you haven’t already, look for a payment gateway partner! If you have, ensure that you have integrated the payment gateway to your system perfectly.
Kitameraki has expertise on both these problems. Feel free to contact us.