Payment gateways are the first step in the online payment process, and they have been crucial in helping e-commerce companies more easily accept online transactions.
Insider Intelligence expects revenue the online payments providers can collect as fees will increase from $82 billion in 2018 to $138 billion in 2024.
Payment gateways are the first step in the online payment process, and they have been crucial in helping e-commerce companies and online payment providers more easily accept online transactions.
The best payment gateways serve as the online version of a payment terminal and front-end processor for online and mobile sellers. They often sell bundled services that include payment acceptance, data reporting, and fraud management.
Insider Intelligence expects that as global retail e-commerce volume continues to rise, revenue the companies processing these payments can collect as fees will increase from $82 billion in 2018 to $138 billion in 2024.
Furthermore, payment companies, merchant acounts, and consumers are all shifting to digital, which is giving gateways more influence. In the US, e-commerce sales totaled $146.2 billion in Q2 2019, making e-commerce nearly 11% of retail overall.
Given this, it’s understandable that more gateways will want to get a piece of the pie. But as more companies pour into this space, it will create difficult decisions for merchants. Which payments gateway provider should you use? What are the inherent advantages and disadvantages of each?
Below, we’ve compiled a list of the industry’s leading payment companies to help you decide. Keep in mind that no one company or gateway has an overwhelming share of the market, and competition among these companies remains strong.
Worldpay
UK-based Worldpay is one of the longest-tenured online payment platforms. The company provides several payment services for both online and in-store channels, and in 2018 was deemed the No. 1 acquirer by purchase transactions in the US. In 2018 Worldpay was acquired by US rival Vantiv, and the combined entity was later purchased by US financial services company FIS in 2019.
Ingenico
Ingenico offers payment solutions across in-store, online, and mobile channels
Business Insider
Ingenico is a legacy payments processor that initially stood out as a top provider by handling in-store card payments – and thus is popular among companies where in-store payments is a top priority. Today, the company offers payment solutions across in-store, online, and mobile channels.
Amazon’s proprietary credit card payment processor supports payments on its parent’s website, which gives it instantaneous access to high payment volume. Furthermore, it has expanded by offering its platform to other merchant sites – an attractive proposition for third-party merchants. One disadvantage, though, is that the gateway helps Amazon strengthen its brand, which many e-commerce merchants must compete against.
Braintree
This PayPal-owned gateway supports payments for mobile-centric merchants, and it benefits from its access to the millions of PayPal sellers. Braintree has secured the business of some of the world’s largest digital merchants, such as Uber and Airbnb. Braintree provides developers with an SDK with multiple features. The firm had an estimated 6 billion processed transactions in 2018, and much of that success stems from its strategic focus on mobile, a high-growth commerce channel.
Stripe
Stripe has become the world’s sixth largest unicorn
Stripe
Stripe has become the world’s sixth largest unicorn at a $35.3 billion valuation. It provides an API that merchants and web developers can use to integrate payment processing into their websites. The company offers several free services (such as refunds) for which PayPal charges transaction fees. Stripe also makes it easy for merchants to update their payment platforms using just a few lines of code. However, merchants must wait two business days for their payments to deposit to an account, and some in higher-risk industries must wait seven business days.
Adyen offers e-commerce companies a payment platform that includes gateway, risk management, and front-end processing services. Much like Braintree, Adyen is a full-stack gateway and counts prominent merchants like Microsoft and Spotify as clients. The company has attracted merchants with a single platform that can support payments in any channel over 250 local payment methods and 200 countries.
Cybersource is a top gateway provider due to its fraud and security risk management solutions. In 2007 it acquired Authorize.Net and the combined entity was acquired by Visa in 2010. Cybersource provides credit and debit card processing and claims to be used by over 450,000 businesses worldwide.
WePay is a payments service provider that was acquired by JPMorgan Chase in 2017. The company grew in popularity due to its flexible APIs to help platforms support and monetize payments. In 2019 WePay launched its product line of Link, Clear, and Core, which it claims solves more integrated payments use cases.
Alipay
Alipay payments and can process payments through online, mobile, and in-store channels
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Alipay was originally launched as a payments platform by Alibaba and has flourished as an Eastern payments player – it holds the majority of payments volume in China. Alipay payments and can process payments through online, mobile, and in-store channels. The company claims over 1 billion users.
Most widely known for allowing merchants to more easily process card payments, Square has become a top competitor in the payments gateway market. Priding itself on enabling sellers of all kinds to grow their business, Square has expanded its offerings to include online payment services and business lending.
This Visa solution offers numerous services including point-of-sale, e-commerce, mobile and phone payment options, billing, e-checks, and credit card readers. Its premium features include advanced fraud detection and secure customer data to let sellers accept payments quickly and safely.
And here is a related Payments & Commerce report that might interest you:
The Payments Ecosystem, which traces the path of an in-store card payment from processing to settlement across key stakeholders, forecasts growth, and defines drivers for key digital payment types through 2024.
