According to “Research Report on Payment Gateway Market by Type from 2020 to 2025 under the COVID-19”. The report pointed out that the global payment gateway market is expected to grow from 50,312.85 million U.S. dollars in 2020 to 94,198.97 million U.S dollars at the end of 2025. With the increasing popularity of the “payment as a service” model, merchants may adopt encrypted payments to create new opportunities for the payment market.
What is a Payment Gateway?
Payment Gateway is the interface between the bank’s financial network system and the internet. It is a set of server devices operated by the bank to convert data transmitted on the internet into internal data of the financial institution, or a designated third-party processing merchant payment information and customer payment instructions.
With the continuous growth of the online market and the further advancement of globalization, the processing of online transactions will become an indispensable function of every payment system. Nowadays, merchants are very inefficient in data transmission. With global payment gateways, this problem can be effectively solved. It enables banks or dealers to maintain high efficiency even in the face of the rapid growth of the online market and the continuous expansion of online transaction volume.
The importance of global payment gateways
Since the past few years, payment methods have rapidly developed from token systems to cashless payments. Global payment gateways allow any business (such as physical stores or online retail) to collect payments through the customer’s preferred bank without compromising sensitive data. The integration of global payment gateways has become one of the most important aspects of any company in every industry. In addition, the growth of online transactions is expected to drive market growth during the forecast period. For example, in India, the number of mobile payment transactions increased from 2.9 billion in 2016 to approximately 6.9 billion in 2017. This is expected to increase various companies’ cooperation with global payment processors in the country, and create new ways for industry participants to enter the market, which will have a positive impact on market growth. In addition, emerging technologies such as the internet of things (IoT) and artificial intelligence (AI) have the ability to perform specific task sets and automate the entire transaction process.
Global payment gateways can guarantee the safety and reputation of merchants. Global payment processors must provide a high degree of reliability and effectively protect information about users and transactions. They should use reliable protection to resist DDoS attacks so that their effectiveness can be guaranteed under any circumstances, and the merchant’s funds remain safe.
Global payment gateways should have legitimacy. Global payment processors have licenses that can legalize their work and ensure the safety of their customers. Data about merchant transactions (all data are innocent) will be legalized, and the service provided must also ensure the confidentiality of its user information. Therefore, payment will be as fast, secure and confidential as possible.
Global payment processors can achieve convenient transactions with a low commission percentage, and fast data processing speeds allow merchants to complete transactions on a global scale. At the same time, the payment gateway website has multiple language versions, so that users can complete payment transactions as easily as possible.
Payment gateway market classification and trend analysis
It is worth noting that more and more Internet users, coupled with the government’s digital initiative is forcing users to conduct online transactions, which may have a positive impact on the market payment gateway market. From 2013 to 2017, the number of global Internet users increased by about 35%, and this number is expected to increase further due to the introduction of 5G high-speed internet technology. Countries such as China are rapidly expanding internet connections in rural areas to increase internet penetration, which may have a significant positive impact on payment gateway providers.
Based on integration of payment gateways, the four most common payment gateway integration methods are hosted payment page, in-context popup, iFrame and API. Hosted payment page is the browser will jump directly from the merchant website to the payment page provided by the payment gateway after the user confirms the order on the merchant website and clicks the “Continue Payment” button. In-context popup means a payment module pop-up box provided by the payment gateway will pop up directly on the current page, then the user can make the payment without leaving the merchant website. iFrame allows the merchant to load the payment component into the page in the form of an iFrame when rendering the payment page. API request is sent directly from the back end of the merchant website to the payment gateway.
The future of global payment gateways should not be limited to a simple integrated payment function. Market competition is getting fiercer and fiercer, and the current trend of global payment gateway payment business is diversification. Global payment processors must be technology- and product-oriented, start from better solving users’ payment problems, improve the convenience and efficiency of payment for the majority of users, and promote the development of the industry.
In the context of the rapid development of information technology, especially the internet, customer data and finance have become the core elements of the future development of the electronic payment industry. Innovative products in the industry continue to emerge, and the application fields continue to expand. The global payment industry will transform from simple channels to the service-oriented electronic payment business. The global payment gateway industry will integrate payment and financial value-added service providers, tending to integrate with mobile and unified payment.
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