The global payment gateway market is anticipated to grow significantly over the forecast period owing to the rise in the use of mobile wallets as well as advancements in mobile payment technology. An increase in online transactions along with the evolution in payment methods, such as the emergence of the token system, cash pooling, and cashless transactions, are the key drivers of the market.
The adoption of technologies such as Artificial Intelligence (AI) and the Internet of Things (IoT) has also resulted in the automation of transactions. One of the essential aspects of every business is the integration of payment gateways as they transfer the information regarding a transaction between the bank or the front-end processor and the payment portal. A payment gateway enables organizations such as brick and mortar stores or online retail platforms to collect money through a bank preferred by the customer without compromising sensitive data.
The payment gateway industry can be segmented by type, organization size, end use, and region. The type segment can be further segmented into hosted and non-hosted payment gateways. Hosted payment gateways are dominating the market as they are economical, convenient, highly secure, user-friendly, and customizable. They are increasingly adopted owing to the easy integrations of payment gateway with the websites and low investments with the systems.
By end use, the market can further be segmented into travel, retail, BFSI, and media & entertainment. As the demand for online retailing is rising across the globe, the number of online payments is also growing, thereby increasing the growth of the payment gateway industry. The retail companies are increasingly adding payment gateways to their websites to boost sales.
Large enterprises are dominating the payment gateway industry over small- and medium-sized enterprises as the volume of transactions is very high in large-scale enterprises, and they require a highly safe and secure mode of transaction, which is facilitated by payment gateways. Small and medium enterprises are the fastest-growing segment as they are rapidly adopting payment gateways for the latter offer fraud management and use special encryption and verification technology to ensure safe transactions.
The Asia Pacific region is expected to dominate the payment gateway market owing to several initiatives taken by governments to enhance the online payment infrastructure in their countries. For instance, China is improving internet access in rural areas, which, in turn, would boost the market. In India, the Reserve Bank of India (RBI) has proposed to regulate payment gateways such as Paytm, Bharat Bill Pay, and Mobikwik, which would make them more accountable and transparent in their work, thereby benefiting the people who are using these gateways for making digital payments.
Increasing data breaches and cyber-attacks coupled with stringent regulations in the payment gateway market such as Payment Card Industry-compliance and certification from a certified authority to provide public-key infrastructure for securing every debit and credit card transaction, are restricting the growth of the market.
The key players in the payment gateway market are Amazon Payments Inc., Adyen N.V., PayU Group, Payoneer, Inc., BitPay, Inc., WePay Inc., VeriFone Holdings, Inc., Alipay.com Co Ltd., Payza, Paytm Mobile Solutions Pvt Ltd., PayPal Holdings, Inc., and Skrill Limited, among others.
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