Payment Gateways Market By Type (Online Mode, Offline Mode), By Application (Retails, Catering Industry, Medicine & Cosmetics, Other), By Region, And Segment Forecasts, 2023 to 2032

Market Overview:

The payment method has changed considerably over the past few years, moving from the token system to cash pooling and cashless transactions. Any type of business, including physical and online retailers, can accept payments through a customer’s preferred bank without jeopardising sensitive data by using a payment gateway. The integration of a payment gateway has become a crucial element for any organization regardless of its industry.

The global payment gateway market size is valued at USD 16.28 billion in 2024 and is projected to reach USD 34.81 billion by 2030, growing at a CAGR of 16.44% from 2024-2030.  Increasing e-commerce transactions are projected to drive market growth. Advances in technology and the worldwide internet penetration rate have made it possible for financial service providers to provide customers with innovative digital services. Governments everywhere are also working to encourage internet access in rural areas

Premium Insights:

• The COVID-19 pandemic and the subsequent lockdowns have resulted in the introduction of numerous payment gateways that enable online payments for purchases made from e-commerce websites. 

• The expansion of the market is expected to be fueled by the use of mobile payments for a variety of transactions, including buying takeaway, movie tickets and many more day-to-day transactions and the use of credit and debit cards by both developed and developing countries for such transactions is expected to further propel the market. 

Payment Gateways Market Dynamics:

Drivers: Explosive e-commerce growth, preference for digital transactions and expansion into emerging markets.

-The surge in online shopping necessitates secure and efficient payment processing solutions. Payment gateways provide a seamless integration between online stores and various payment methods, facilitating a smooth checkout experience for customers.

-The increasing comfort level with online payments and the convenience they offer are driving a shift away from cash and towards cashless transactions. Payment gateways cater to this preference by offering a variety of payment options.

-Rapidly developing economies with growing internet penetration and smartphone adoption present significant opportunities for the payment gateway market. Tailored solutions and addressing infrastructural challenges are key to success.

Restraints: High competition with price pressures, regulatory landscape & compliance challenges and limited integration with alternative payment methods.

-The payment gateway market is becoming increasingly competitive, leading to price pressures and shrinking margins for some providers. Differentiation through unique features, exceptional customer service, and value-added services is crucial.

-Navigating evolving regulations regarding data privacy (like GDPR) and financial transactions can be complex and expensive for payment gateway providers. Ensuring compliance requires ongoing efforts and adherence to changing regulations.

-While credit cards remain dominant, the rise of alternative payment methods like cryptocurrency and BNPL (Buy Now, Pay Later) necessitates seamless integration with payment gateways to cater to evolving consumer preferences.

Opportunities: Focus on open AI & collaboration, emerging payment methods and expansion into niche markets.

-Developing open APIs and fostering collaboration with other financial technology providers can create a more integrated financial ecosystem and facilitate easier integration with various platforms.

-Integrating with new and evolving payment methods like cryptocurrency, BNPL, and instant bank transfers can attract new customers and cater to a broader range of payment preferences.

-Tailoring solutions for specific industries like travel, healthcare, or subscription services can cater to their unique payment needs and open doors to new market segments.

Market By Payment Gateways Type Insights:

Based on Type, the market is segmented into hosted, self-hosted and other types. In 2023, the hosted segment led the market, capturing more than 55% of global revenue. The demand for hosted payment gateways is rising due to their easy set-up and reduced merchant liability. The gateways enhance security, prevent fraud and comply with PCI DSS, making them a safer option for payment processing.

Based on Enterprize size, the market is segmented into large enterprises and small & medium-sized enterprises. Large enterprises have been leading the market in this segment attributed to factors like high website traffic that need effective checkout solutions. Payment gateways ensure convenient and secure transactions by supporting various digital payment methods, like net banking and credit/debit cards. They use industry-standard encryption to protect sensitive customer and merchant data.

Market By End-Use Insights: 

Based on end-use, the retail and e-commerce businesses are expected to remain the dominant end-user segment in 2024. The evergrowing online shopping landscape demands secure and convenient payment processing solutions for a smooth customer experience. Payment gateways cater to this need by offering various payment options and fraud prevention tools. 

Market By Region Insights:

Based on regional coverage, the market can be segmented into North America, Asia-Pacific and Europe. In 2023, North America held a dominant position in the market, contributing over 35% of global revenue. Technological developments and the use of payment gateways in expanding end-use industries like retail and e-commerce are responsible for the growth. The presence of notable players like PayPal Holdings Inc., Mastercard, and Amazon Payments are also driving market growth. China and Asia-Pacific in general have also witnessed significant expansion into the global market.

Competitive Scenario:

Major players in the market consist of Adyen, Amazon Payments Inc., Authorize.Net, Bitpay, Inc., Braintree, PayPal Holdings, Inc., PayU Group, Stripe, Verifone Holdings, Inc.and Wepay, Inc.

Scope of Work-Payment Gateways Market

Key Market Developments:

• September 2022-With an emphasis on the e-commerce, retail, travel, cryptocurrency, and financial services sectors, British payments company Paysafe partnered with Spreedly, a payments orchestration platform, to assist merchants with their international payments across the UK and Europe. Transactions could be made through Paysafe's payment gateway.

• November 2022-The leading B2B and B2C companies' payment orchestration platform, BlueSnap, has extended its collaboration with the leading eCommerce agency, objectsource, to help European online retailers improve Magento integration for the dynamic EU market.

• August 2022-The Reserve Bank of India (RBI) granted the financial services platform Mswipe Technologies an in-principle Payment Aggregator (PA) licence. Mswipe will be able to create an internal online payment gateway with this approval.

Frequently Asked Questions (FAQs)

1. What factors are driving the growth of the payment gateway market?

Ans. Factors driving market growth include explosive e-commerce growth, preference for digital transactions and expansion into emerging markets.

2. What are the major challenges in the payment gateway market?

Ans. Challenges include high competition with price pressures, regulatory landscape & compliance challenges and limited integration with alternative payment methods.

3. Who are the key players in the market?

Ans. Major players in the market include Adyen, Amazon Payments Inc., Authorize.Net, Bitpay, Inc., Braintree, PayPal Holdings, Inc., PayU Group, Stripe, Verifone Holdings, Inc. and Wepay, Inc.

4. What opportunities exist in the market?

Ans. Opportunities include a focus on open AI & collaboration, emerging payment methods and expansion into niche markets.