Online Payment Gateway Market

Online Payment Gateway Market Outlook for 2024 to 2034

The online payment gateway market is currently valued at US$ 127.45 billion in 2024. It is set to register a CAGR of 9.60% and is estimated to reach US$ 318.74 billion by 2034. The virtual payment gateway market is evolving due to high demand for IoT-based payments reinforced by technological improvements.

Growth Analysis of the Online Payment Gateway Market

• Payment gateway securely connects customers and merchants, ensuring secure transactions and reducing financial losses, compelled by the growing popularity of online payment methods and high-speed internet.
• The market is anticipated to develop due to rising mobile payments demand, eCommerce sales, internet penetration, and a shift toward digital channels for online money transfers.
• Companies are utilizing payment gateways for secure online transactions, preventing fraud and ensuring a seamless shopping experience, accordingly eliminating the need for physical store queues.
• Technological improvements and internet penetration influence digital services, mobile app usage, and rural promotion, enabling eCommerce, payment infrastructure, and merchant integration.
• Transaction methods have evolved rapidly, incorporating numerous third-party payment gateways for secure collection of sensitive data in businesses and online retailing, compelled by climbing online transactions.
• The retail sector is experiencing changes due to the cashless economy, mobile banking, instant payments, digital commerce, and regulatory agencies. This is propelling the demand for local bank-integrated payment gateways.

2019 to 2023 Historical Analysis vs. 2024 to 2034 Market Projection

Demand has historically developed at a CAGR of 10.0%. However, sales are likely to slow down at a bit, displaying a CAGR of 9.60% from 2024 to 2034. This market is maturing due to increased transaction data and the popularity of other online payment methods like credit cards and mobile wallets.

High internet usage and extravagant sales through eCommerce are anticipated to propel growth in the payment gateway market. However, the market expansion is impeded by the risk of online fraud, where malicious individuals can misuse account information. Such fraudulent activities hinder the market's growth and remain an immediate concern.

The COVID-19 pandemic has positively affected the payment gateway market by increasing online payments. Despite lockdowns being enforced, the market has grown due to the rise of eCommerce. UPI's growing importance in the post-pandemic environment is anticipated to stimulate growth in the digital sector despite challenges such as cyber-attacks and inadequate internet access in remote areas.

The online payment gateway market is set to get back on track due to the emergence of eCommerce platforms and increased internet access. This is driven by high-speed internet and the demand for mobile-based payments, like for takeout and cinema tickets, with both developed and developing nations using debit or credit cards.

Sudip Saha

Principal Consultant

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Key Trends Influencing the Online Payment Gateway Market

Adoption of QR Codes Streamlines Online Transactions

Nowadays, with the improvement of technology, most retail stores have incorporated distinctive QR codes to simplify the online payment process for consumers. Smartphones or other IoT devices can scan these codes. They allow customers to make payments easily and quickly.

The same QR codes can be used across different payment apps, meaning customers can pay for their purchases using their preferred payment service. This has increased the convenience of making payments and has subsequently led to a rise in the use of online payment gateways.

With this system, customers no longer need to carry cash or credit cards, reducing the theft risk and providing a more secure and efficient payment experience.

Online payment gateways such as Gpay, Paypal Holdings, and AmazonPay have gained immense popularity due to their cashback, rewards, and voucher schemes. These encourage customers to use these platforms.

Users also consider these payment gateways a secure medium for online transactions. In addition, online payment gateways are implementing advanced security measures like fingerprint and face scanners to enhance safety and prevent fraudulent activities.

The eCommerce Industry Pushes the Adoption of Online Payment Gateway

The payment gateway initiative is developing due to rising demand for mobile payments, internet penetration, and eCommerce sales, compelled by evolving consumer and merchant preferences.

Online payment gateways are popular for simplifying safe online transactions and preventing fraud. They encrypt sensitive data, reducing long lines and in-store purchases. Technological improvements and internet penetration rates enable financial service providers to offer innovative digital services, while smartphone apps compel the growth of eCommerce banking.

The eCommerce boom is pushing the payment gateway enterprise further, increasing demand for secure, effective solutions. Mobile commerce, operated by smartphones, requires payment gateways with robust security features like tokenization, fraud detection, and encryption to meet customer and business expectations.

Adoption of Biometric Payment Cards Spread Contactless Payment Usage

The demand for biometric payment cards is rising due to technological refinements and widespread contactless payment acceptance. Biometric cards gaining popularity over NFC cards due to their elevated transaction limits.

Consumers are increasingly adopting biometric payment cards for mobile phone unlocking and payment processing. This trend is compelled by reduced administration and increased demand for secure and efficient transactions.

Retailers can reduce administrative costs and accept conventional payment methods by using biometric payment cards, which reduces payment queues and increases adoption. Thus, biometric payment card trends create opportunities for online payment gateways.

Businesses are leveraging biometric payment cards. This is leading to numerous banks and financial institutions collaborating with biometric payment service providers to offer smart cards to their clients.

Category-wise Insights

The following part offers an in-depth analysis of the different segments of the online payment gateway market. The demand for hosted payment gateways is significant, whereas the demand from large enterprises is augmenting as of 2024.

Hosted Payment Gateways Records almost 39.4% of Market Share

Hosted payment gateways to hold a 39.4% market share in 2024 due to the augmented application of third-party transactions.

• As hosted payment gateway is a third-party checkout system, businesses across different industries widely use them. This is because it offers a secure and reliable payment processing solution for online transactions. It redirects customers to the payment service provider's (PSP) website for payment processing
• Hosted payment gateways are anticipated to remain popular due to their convenience, security, and ease of use. This makes them attractive for businesses like utilities that rely on online transactions for revenue.
• With technological refinements, hosted gateways are foreseen to become more sophisticated and user-friendly. This is set to make them essential tools for businesses to streamline payment processing operations and enhance customer satisfaction.

Large Enterprises Cultivates around 26.7% of Market Share

Large enterprises with 500-999 employees are increasingly utilizing online payment tools to streamline online transactions, holding a market share of 26.7% in 2024. This indicates that cashless transactions are envisioned to replace hectic brick-and-mortar payment operations.

• With its global applications, online payment gateways are pushing market growth in various large enterprises with 500 to 999 employees. This includes banking dashboards, e-transaction apps, and tokenized transactions.
• Businesses in the eCommerce sector rely on payment gateways to accept and manage payments. They also deploy them to manage risks, process transactions, and provide information tracking to financial institutions and customers.
• The enterprise gateway payments platform simplifies financial institutions' payment infrastructure. It enables successful payment strategy execution on a single, integrated, real-time platform.
• The growing adoption of digital transaction techniques and payment processing by large-scale firms is boosting the demand for payment gateways in the large enterprise industry.

Country-wise Insights

Based on the statistical data, industries in Germany and Japan to develop comparatively in the upcoming decade. Simultaneously, cashless payment solution industries in the United States and China are hitting the roof. ANZ’s online payment gateway sector is anticipated to climb sharply in the upcoming decade.

The United States Paves the Way for Online Gateways’ Growth

The industry in the United States is witnessing a wave of change, showcasing a CAGR of 9.60% through 2034. This includes collaboration on improving banking technologies with the integration of chatbots and interactive platforms.

• The remote commerce sector in the United States is rapidly developing. This presents a significant opportunity for small and medium-sized enterprises (SMEs) to tap into new revenue streams by creating interactive online payment gateways.
• According to industry prognoses, mobile devices are envisioned to comprise almost 35% of the eCommerce market. The market growth in banking technology is fueled by the increasing adoption of smartphones among older populations. They are now more comfortable using mobile technology for digital transactions.
• Smartphones are highly prevalent among juveniles, with an impressive penetration rate of 93%. With this shift toward mobile commerce, online transaction platforms such as PayPal, Venmo, Cash App, and Apple Pay are gaining traction in the United States.

Germany’s BFSI Industry Develops Demand for Online Transaction Gateways

Demand for online transaction getaways in Germany is estimated to develop at a CAGR of 5.30%. Banks and finance companies are developing rigid transaction solutions in the country alongside the government.

• Germany, a major player in the global online payment market, is home to numerous BFSI giants such as Deutsche Bank, Commerzbank. It also hosts developing organizations offering digital transaction management solutions, owing to its early adoption of advanced technologies.
• In a competitive market, digital transaction management suppliers desire to shift their focus to software solutions and services to maintain market dominance and revenue growth in Germany. They also focus on document safety and security solutions to boost demand for DTM solutions.

China’s Retail Sector to Witness Significant Growth in Online Payment Platforms

Demand for online transactions in China is anticipated to highlight a CAGR of 11.70% between 2024 and 2034.

• China's retail stores are integrating mobile payment applications like PayPal, Samsung Pay, Apple Pay, AliPay, and WeChat Pay to accept payments. This is compelled by changing lifestyles, daily commerce, and online retailing growth.
• China's retailers are leveraging at-home delivery and online shopping convenience to boost profits. Hence, payment gateways are becoming a paramount infrastructure for online shopping carts and point-of-sale systems.
• China's retail sector is transforming due to the cashless economy, mobile banking, instant payments, digital commerce, and regulatory agencies' impact. These offer convenience and faster queues.

Companies Advances Digital Transaction Technologies with Latest Innovations in Japan

Japan's early technology adoption is set to lead to a 6.00% CAGR in modern eCommerce by 2034. The country is credited with inventing NFC and QR Codes as key cashless payment technologies.

• The convenience of contactless-enabled cards has significantly influenced users' spending habits, spending more on these cards than traditional non-contactless ones.
• The COVID-19 pandemic has accelerated the adoption of contactless payments, particularly in Japan's restaurants and quick-service establishments. This is significantly impacting spending through mobile wallet activation.

Australia and New Zealand’s Online Gateways Industry to Skyrocket in the Forthcoming Decade

Demand for remote online transactions in Australia and New Zealand is projected to develop at 9.10% CAGR by 2034 due to the province’s growth in cashless payment services sectors.

• The payment gateway demand in Australia and New Zealand is developing due to technological improvements and the growing demand for mobile payments. This is further compelled by the increasing use of mobile banking channels such as G-Pay and AmazonPay.
• Consumers in Australia and New Zealand increasingly rely on mobile wallets for secure and reliable digital payment, helmed by their preference for seamless user experience. This demand for secure gateways is escalating due to the rapid pace of innovation in the digital economy.

Market Players Shaping the Outlook of the Online Payment Gateway Market

The online payment gateway market is currently experiencing a surge in popularity, and manufacturers are investing significantly in innovation, research, and development practices to uncover new applications of the BFSI industry. With technology as their aid, players focus on ensuring safety, quality, and customer satisfaction to attract a larger customer base.

Market participants are introducing new features such as automatic reminders, customized processes, seamless document production, and automated tracking to improve their digital transaction solutions.

Additionally, vendors are developing solutions that comply with various global security standards and agreement audits. Market participants are concentrating on new product development, strategic collaborations, mergers and acquisitions, and company expansions to strengthen their market position.

Recent Developments in the Online Payment Gateway Market

• In April 2024, NOWPayments, a leading cryptocurrency payment gateway, revealed stablecoin usage trends on its platform. USDTSOL leads with 85.9% of stablecoin transactions, followed by USDTARB (10.28%) and USDTOP (3.82%). The analysis reflects growing trust in stablecoins, highlighting NOWPayments' commitment to innovation and adaptability.
• In February 2024, Euronet acquired Singapore-based Infinitium Holdings, a digital payments company, to integrate with Euronet's Ren payments platform, enhancing online payment security and fraud prevention.
• In July 2023, Tap Payments received payment gateway technology certification from Mada, Saudi Arabia's largest domestic payment network, allowing businesses to leverage advanced payment features and secure storage.
• In April 2022, ANZ Worldline Payment Solutions, a joint venture between ANZ and Worldline, offered advanced payment solutions for Australian merchants, catering to various segments, including retail, hospitality, and fuel.

Key Companies in the Online Payment Gateway Market

• Adyen
• Amazon Payments Inc.
• Authorize.Net
• Bitpay, Inc.
• Braintree
• PayPal Holdings, Inc.
• PayU Group
• Stripe
• Verifone Holdings, Inc.
• Wepay, Inc.
• Square
• Worldpay
• 2Checkout
• Razorpay

Key Coverage in the Online Payment Gateway Market Report

• Growth of the Online Payment Gateway in the United States
• Development Analysis of the Digital Transaction Technology Sector
• Top 10 Emerging Trends in Remote Banking Operations Market
• Growth Overview of Mobile Payment Transaction Market in the United States
• Dynamics of Digital Transaction Management Market and Payment Bank Solutions Market

Key Segments

By Getaway Type:

• Hosted Payment Gateway
• Self-hosted Payment Gateway
• API/Non-hosted Payment Gateway

By Enterprise Size:

• Small Offices (1 to 9 employees)
• Small Enterprises (10 to 99 employees)
• Medium-sized Enterprise (100 to 499 employees)
• Large Enterprises (500 to 999 employees)
• Very Large Enterprises (1,000+ employees)

By Region:

• North America
• Latin America
• Europe
• East Asia
• South Asia
• Oceania
• Middle East and Africa