Online payment systems have come a long way over the last decade. Payflex takes a closer look at how the emergence of new players in the payment gateway space has helped democratise the online payment industry.
Previously, merchants had little choice when it came to online payment systems. But, as the eCommerce industry has evolved in recent years, the payment gateway has begun to play an instrumental role in the customer’s experience. So much so, that 73% of online consumers decide whether they’ll make a purchase from a company based on the type of payments they accept.
Evolution of the online payment system
Growing eCommerce adoption has created fertile ground for the emergence of several online payment gateways in recent years.
And according to Business Insider’s Payment Gateways Report, gateways are getting increasingly sophisticated.
“They’re becoming easier to integrate. And are incorporating value-added services outside of just payments processing, such as fraud detection/prevention and transaction analytics.”
At the same time, research commissioned by the Better Than Cash Alliance shows online payment systems have had a positive impact on financial inclusion because they help simplify payment acceptance for smaller merchants.
“[Payment gateways] are supporting a point of entry for many new or alternative payment services that can reach non-traditional consumers. In addition, they offer services to merchants who previously didn’t have access to digital financial services.”
A $90 million market
The global online payment gateway market is expected to grow from $43 million in 2019 to $90 million by 2025, according to the Online Gateway Market report.
The report says major factors driving this growth include growing eCommerce revenues, increasing internet penetration, acceptance of contactless payments, and changing consumer preferences.
Payment choice a critical lever for growth
While many merchants are still using single payment gateways, it is clear one-size-fits-all approach is no longer relevant. Today’s customers expect to be able to buy what they want, when they want, and how they want. Offering multiple payment gateways is a critical lever for business growth. On the flipside, businesses that stick to a single gateway strategy will quickly find themselves on the back foot.
eCommerce retail revenues projected to grow to 6.54 trillion US dollars by 2022. In other words, there’s no question that gateways will continue to play a pivotal role in the online payment ecosystem. As a merchant, it’s vital to adopt payment strategies that enhance your offering and protect your bottom line. Therefore, choosing multiple online payment systems is vital to remaining competitive in a highly overcrowded online marketplace.
