A payment gateway that is well-functioning and efficient is the keystone of every transaction. The holidays will definitely put many payment gateways to the test as they will face higher than normal sales volumes.
Ultimately, the strength of a fully-capable payment gateway can be narrowed down to evaluating the following features:
- Transaction speed
- Consistency in uptime
- Authorization failure rate
- Onboarding easability
- API accessibility
- Methods of payment supported
- Geographic and vertical reach
- And cost
Insights Gathered From Payment Gateway Study
The Strawhecker Group analyzed 100 payment gateways and their impact on business in a recent study.
- The most representational vertical.
The most “widely served” vertical by payment gateways was general retail. It was estimated that 52% of payment gateways serviced this vertical. This was followed by Healthcare at 22%, Restaurants at 19%, and Education at 14%.
- Full access to APIs.
In the study, it was found that 57% of gateways had “open developer center pages”, which also includes complete access to their APIs, without the need for any credentials. Some gateways (18%) had “quasi-public” APIs. This means that APIs were not accessible by third parties. Instead, they require the extra step to fill out API access forms or setting up a sand box account in order to gain full access.
- Fees and monthly costs.
According to the study, 24% of payment gateways did charge a payment gateway setup fee and half (50%) charged a monthly fee. However, those 50% who charged a monthly fee had dropped from 74% of those payment gateways who did charge a monthly fee as recently as one year ago. This is most likely due the COVID-19 pandemic.
- Geographic location.
The majority of payment gateways that were analyzed in this study were located in the region of North America. More than one third of the payment gateways studies have the capacity to serve Europe. Some sizable representations are able to serve the APAC and Latin American regions.
- Reporting features.
Just about all payment gateways featured (99%) provide a certain form of reporting capability online within their dashboard. With only a slightly lesser amount of payment gateways (94%), include a reporting API that enables merchants to ask for reporting data “on-demand”.
- Changes in function year over year.
Since 2019, little has changed in terms of the features offered by payment gateways that are stable. Payment gateways still offered PayPal functionality at 42%. Gift card functionality has only gone up by 2%. This resulted in 60% of payment gateways having this feature.
Having an efficient and fully capable payment gateway is a critical component to running a successful e-Commerce business, especially during these times of dramatic shifts in shopping behavior. Many brick and mortar businesses have had to pivot as part of their long-term strategy in order to weather the consequences of the pandemic.
For payment gateway companies, not charging a monthly fee is a refreshing and welcomed break for businesses who have lost their clientele and are struggling to keep their companies from going under. Reporting features are also very important so that businesses can see where their customers are coming from and how they can be served better.