Payment Gateways Market by End-user, Type, and Geography - Forecast and Analysis 2023-2027

Payment Gateways Market Forecast 2023-2027

The payment gateways market size is forecast to increase by USD 8.55 billion, at a CAGR of 11.72% between 2022 and 2027. Market expansion relies on multiple factors, notably the widespread embrace of contactless payment solutions, spurred by convenience and hygiene considerations. Concurrently, there's an increase in demand for PoS terminals as end-users seek efficient transaction processing. Additionally, the market's trajectory is influenced by a steadfast commitment to ensuring superior customer satisfaction. As businesses prioritize seamless payment experiences and swift transaction processing, the demand for advanced PoS technologies intensifies. This confluence of factors underscores the pivotal role of contactless payments and PoS terminals in shaping the modern retail landscape, driving efficiency, and enhancing overall customer experiences.

What will be the Size of the Market During the Forecast Period?

To learn more about this report, View Report Sample

Market Segmentation

This market report extensively covers market segmentation by end-user (large enterprises, micro and small enterprises, and mid-sized enterprises), type (hosted and non-hosted), and geography (APAC, North America, Europe, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

Market Dynamics and Customer Landscape

In today's digital economy, the use of payment gateways for online transactions has become increasingly prevalent. With the consumer inclination towards cashless economy and the coronavirus outbreak driving record highs in e-commerce sector, the need for secure and cost-effective payment solutions has become imperative. Payment gateways facilitate online transactions by processing sensitive data securely, enabling consumers to make payments online using various digital methods such as cards and bank apps. Merchant-acquiring companies like Worldline play a crucial role in providing digital infrastructure for small merchants to accept bulk transactions through payment gateways.

However, with the increasing use of online services, the risk of cyberattacks leading to financial losses and business interruptions is a significant concern. Therefore, it is essential to ensure robust cybersecurity measures are in place to protect sensitive data during online transactions. Payment gateways have become an integral part of the digital payments ecosystem, enabling contactless payments and record-breaking bulk transactions. Such gateway providers must prioritize security while offering cost-effective solutions to cater to the growing demand for digital payments. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The high adoption of contactless payment solutions is one of the key drivers supporting the market growth. The market has experienced significant growth with the advent of mobile payment gateways, such as Apple Pay, Samsung Pay, and Android Pay. Consumers can now make payments online without the need for physical credit or debit cards. Retailers utilize Point-of-Sale (PoS) terminals, which accept and process payments over the internet and print receipts. Sensitive financial data is saved on smartphones for these transactions. Big players offer NFC-based mobile payment options for security reasons, preventing unauthorized access to card information.

Further, with increasing internet penetration, online transactions have become commonplace. Merchant acquiring companies like Worldline and digital payment platforms such as bank apps, digital infrastructure, and mobile-based apps have made transactions more convenient for consumers. Small merchants and micro merchants have also benefited from cost-effective digital solutions. The pandemic has accelerated the shift towards a cashless economy, with e-commerce transactions through platforms like Flipkart-owned PhonePe and escrow accounts becoming increasingly popular. However, security concerns, including phishing, denial of services, and cyberattacks, remain a challenge for the digital payment industry. Hosted payment solutions and internet banking platforms like Paystack must prioritize security to maintain consumer trust. Such factors will increase the market growth during the forecast period.

Significant Market Trends

The emergence of NFC-based payment technology is another factor supporting the market growth. In the modern digital economy, payment gateways facilitate online money transfers between consumers and merchants, enabling secure and efficient transactions in a cashless society. These platforms utilize sensitive data, such as payment information, through the internet for various online transactions. With increasing internet penetration, digital payments have become a cost-effective solution for both large enterprises like Worldline and merchant acquiring services, as well as micro merchants and small businesses. It supports various digital channels, including bank apps, digital infrastructure, and mobile-based payments. During the coronavirus pandemic, the use of digital payments, such as those facilitated by Flipkart-owned PhonePe and other e-commerce transactions, has surged.

However, security concerns, including phishing, denial of services, and cyberattacks, necessitate robust security measures and escrow accounts to protect consumer interests and maintain trust. Hosted payment solutions, like Paystack, offer a convenient and cost-effective alternative for merchants, allowing them to accept online payments without the need for extensive digital infrastructure. Despite these benefits, it is crucial to address the potential risks and challenges associated with digital transactions, ensuring a secure and reliable experience for all parties involved. Thus, the increase in the demand for cashless transactions is expected to propel the growth of the market during the forecast period.

Major Market Challenge

One of the major challenges for the market is the high operating and maintenance costs of PoS terminals. The market for payment gateways has experienced substantial growth, driven by the increasing preference for digital payments among consumers. With the widespread use of the internet and the rise of online transactions, businesses, including retail stores and restaurants, have shifted towards digital solutions. Payment gateways facilitate the transfer of money securely over the internet, processing sensitive data from cards or bank apps. Worldline, Merchant acquiring, and Unified Payments are key players in the merchant acquiring space, providing digital solutions for businesses. Small merchants and micro merchants have also embraced digital payments due to their cost-effectiveness, especially during the pandemic. Online money transfers through digital channels, such as internet banking, mobile-based apps, and e-commerce transactions, have become increasingly popular.

However, payment gateways offer various solutions, including hosted payments, to ensure secure transactions. Flipkart-owned PhonePe and Paystack are popular digital payment platforms that provide escrow accounts to mitigate interest risks for merchants. The growth of digital payments in a cashless economy has been accelerated by the coronavirus pandemic. Despite these benefits, the cost of using gateways, including setup costs, transaction fees, and monthly subscription fees, can be significant. Nevertheless, for businesses seeking to expand their reach and offer convenience to consumers, the investment may be worthwhile. This is a potential challenge that could impede the growth of the featured market during the forecast period. 

Customer Landscape

The market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.

 Customer Landscape

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Adyen NV: The company offers payment gateways such as Adyen digital payment solutions. Also, the company provides financial technology with products such as payment platforms and other financial products.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Amazon.com Inc.
• B2Broker Ltd.
• BitPay Inc.
• Block Inc.
• CCBill LLC
• Fidelity National Information Services Inc.
• Global Payments Inc.
• Infibeam Avenues Ltd.
• Ingenico Group SA
• JPMorgan Chase and Co.
• Mastercard Inc.
•  MIH PayU BV
• Payoneer Global Inc.
• Razorpay Software Pvt Ltd.

Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.

What is the Fastest-Growing Segment in the Market?

The market share growth by the large enterprises segment will be significant during the forecast period. The market is experiencing significant growth due to the increasing number of online transactions among large enterprises in sectors such as BSFI, IT, and manufacturing. The market is driven by the shift towards digital payments and cashless economies, as well as the integration of contactless and card-based payments in modern vending machines. 

Get a glance at the market contribution of various segments View the PDF Sample

The large enterprises segment was valued at USD 2.53 billion in 2017 and continued to grow until 2021.  Revenue in this market is primarily generated by large enterprises, which prefer technologically advanced services like transaction gateways and mobile wallets. Key factors fueling market growth include the widespread use of internet penetration, the rise of e-commerce transactions during the pandemic, and the increasing popularity of mobile-based payments. Companies such as Worldline, Unified Payments, and Flipkart-owned PhonePe are major players in merchant acquiring and digital payments. However, security concerns, including phishing, denial of services, and cyberattacks, remain significant challenges for the market. Cost-effective solutions for small merchants and micro merchants are also driving growth, with digital infrastructure and bank apps becoming increasingly important for online money transfers. Despite these opportunities, the market faces challenges such as the need for robust security measures and the potential for interest rates to impact consumer adoption of digital channels.  This is a key factor driving the growth of the focus market. 

Which are the Key Regions for the Market?

For more insights on the market share of various regions Download PDF Sample now!

APAC is estimated to contribute 30% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The market in APAC is projected to experience significant growth due to the increasing adoption. The coronavirus outbreak has led to a consumer inclination towards contactless services and online transactions, resulting in record highs for the e-commerce sector. Integration of transaction gateways with online platforms and hardware devices, such as smartphones and PoS systems, is crucial in preventing financial losses and business interruptions.

In addition, developing sectors, including the BFSI industry and e-commerce, are prioritizing digitalization and processing efficiency to ensure customer satisfaction. Digital wallets and contactless payments are gaining popularity for faster transactions and improved customer relationships. Bulk transactions and onsite payments are also being facilitated through advanced gateway solutions. Mortgages and retirement planning are among the various use cases for payment gateways, further expanding their market reach. Such factors are expected to drive the regional market growth during the forecast period. 

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• End-User Outlook 
  • Large enterprises
  • Micro and small enterprises
  • Mid-sized enterprises

• Type Outlook
  • Hosted
  • Non-hosted

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

Payment gateways are essential components of online businesses, enabling secure and efficient transactions between merchants and customers. In today's market, numerous payment gateways compete for merchants' attention, offering various features and benefits. Merchants must consider several factors when choosing a payment gateway, such as ease of integration, transaction fees, security, and compatibility with different currencies and payment methods. Some popular payment gateways include PayPal, Stripe, and Square. These companies invest heavily in marketing efforts to attract new merchants. For instance, they offer free trials, discounted rates for new customers, and seamless integration with popular e-commerce platforms.

Additionally, they provide advanced features like fraud detection, recurring billing, and customizable checkout experiences. Moreover, consortiums like Masterpass and Visa Checkout aim to simplify the checkout process by allowing customers to save their payment information and use it across multiple merchants. Transacting with these services is convenient and secure, as they are backed by the respective payment networks. In conclusion, payment gateways play a crucial role in the success of online businesses. Merchants must carefully evaluate their options based on their specific needs and choose a gateway that offers the best combination of features, security, and cost-effectiveness.
 

Market Scope
Report Coverage	Details
Page number	171
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 11.72%
Market growth 2023-2027	USD 8.55 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	10.86
Regional analysis	APAC, North America, Europe, South America, and Middle East and Africa
Performing market contribution	APAC at 30%
Key countries	US, China, Japan, UK, and Germany
Competitive landscape	Leading Companies, market positioning of Companies, competitive strategies, and industry risks
Key companies profiled	Adyen NV, Amazon.com Inc., B2Broker Ltd., BitPay Inc., Block Inc., CCBill LLC, Fidelity National Information Services Inc., Global Payments Inc., Infibeam Avenues Ltd., Ingenico Group SA, JPMorgan Chase and Co., Mastercard Inc.,  MIH PayU BV, Payoneer Global Inc., Razorpay Software Pvt Ltd., Visa Inc., One97 Communications Ltd., PayPal Holdings Inc., Stripe Inc., and VeriFone Inc.
Market dynamics	Parent market growth analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

View the PDF sample

What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2027
• Precise estimation of the market size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across APAC, North America, Europe, South America, and Middle East and Africa
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of market companies

We can help! Our analysts can customize this market research report to meet your requirements. Get in touch