The payment gateway market is set to grow from its current market value of more than USD 20 billion to over USD 60 billion, as reported in the latest study by Global Market Insights Inc.
Growing proclivity towards online shopping and accelerating demand for secure digital payments and mobile payment technology has created a massive demand for efficient payment gateway solutions among various businesses. Ongoing penetration of smartphones and internet in conjunction with the emergence of online banking apps and digital payments is further fueling the demand for payment gateway systems. The rising demand for these solutions is positively influencing the business space for payment gateway market.
Security of the online transaction has been a major challenge faced by the businesses as well as the customers. In this regard, payment gateways are gaining a wide prominence as they offer high security to the businesses for performing online transactions.
An overview of some of the major trends that are strongly influencing the business space is as under:
Development of advanced solutions by market players
Shifting consumer preference for digital payments has prompted the market participants to develop offerings suiting consumer demand in order to gain a competitive edge in the industry. Citing an instance, in 2021, renowned payment technology firm Splitit announced the availability of a new service dubbed Splitit Plus that will allow merchants to provide payment installments to their customers in just few minutes. The company claims that Splitit Plus has been developed as an integrated payment gateway that offers an all-in-one platform combining its installment payment platform with a card processing solution for the installments.
Mounting demand for local bank integrated payment gateway
Growing digitalization across banks is the major factor which is augmenting the demand for local bank integrated payment gateway. This payment gateway directs customers to banks while performing a financial transaction wherein the users can add their financial credentials. This payment solution is fast and easy to setup which has impelled its adoption in SMEs. Considering the high product usability, local bank integrated payment gateway segment is anticipated to record a robust CAGR of over 15% through 2027.
Rising popularity across SMEs
SMEs are showing great interest in deploying digital payment solutions to avoid long queues of customers. Besides, digital payments are faster than the conventional methods of payment which enables these enterprises to offer an improved customer experience. These payment techniques also help SMEs in reducing the risks like thefts, arising from physical security breach on their premises. On account of these factors, SME segment had captured a market share of over 60% in 2020 and is expected to grow exponentially in the coming years.
Growing adoption in media & entertainment sector
Lately, media & entertainment industry has emerged as a lucrative segment for payment gateway market. This is majorly due to a considerable rise in the adoption of advanced technologies, such as AI and IoT in the media & entertainment sector. The entertainment industry is emphasizing on improving the customer experience by providing digital payment services at movie theatre, amusement parks, and plays.
Increasing digitization in BFSI sector in Europe
Payment gateway market is observing a significant growth in Europe and is estimated to record an appreciable valuation of over USD 15 billion by 2027. The major factor that is positively influencing the progression of regional market is the expanding digitalization across the financial sector. Several major banks in the continent are now deploying different digital solutions for enhancing the banking experience for their customers. In addition, rising number of internet banking users is further favoring the market growth.
Rising penetration of internet and smartphones coupled with shifting consumer inclination towards digital payment solutions has instigated the adoption of payment gateways over the recent years. With the ongoing technological advancements in these payment solutions, their demand will further increase in the coming years which in turn will enhance the business outlook.
