Payment Gateway Market Analysis

Payment Gateway Market Analysis

Based on type, the market is segmented into hosted, non-hosted, and local bank integrated. In 2023, the hosted accounted for over 60% of the market share and is expected to exceed USD 80 billion by 2032. The rise of mobile commerce has driven hosted payment gateways to optimize checkout flows for mobile devices. These gateways now feature responsive designs and seamless mobile experiences, reducing payment friction. As mobile shopping grows, hosted gateways prioritize mobile-friendly layouts that adapt to various screen sizes and improve load times.
 

Integrating Apple Pay and Google Pay further enhances the mobile checkout experience. Global eCommerce necessitates multi-currency support in hosted payment gateways. These gateways now facilitate transactions in multiple currencies, enhancing convenience for international customers. For instance, in August 2024, Three payment companies have secured the cross-border payment aggregator license from the Reserve Bank of India (RBI). These companies are BillDesk, Amazon Pay, and Adyen. They join Cashfree, the first company to obtain this license, on the list of authorized payment aggregators.
 

Based on the organization size, the payment gateway market is divided into SME and large enterprise. The large enterprise segment held 65.5% of the market share in 2023. Large enterprises require payment gateways that integrate seamlessly with ERP and CRM systems like SAP or Oracle to streamline financial processes. By automating payment workflows and integrating with invoice, accounting, and inventory systems, these gateways enhance operational efficiency. Custom APIs and advanced integration capabilities are essential for managing complex financial ecosystems, enabling real-time data sharing and reporting.
 

For instance, in August 2024, EBizCharge and PDI Technologies have partnered to integrate a payment solution within the PDI Enterprise ERP system. This integration enabled PDI Enterprise users to process credit cards directly through the EBizCharge payment gateway. Fully PCI compliant, EBizCharge will provide advanced data encryption and tokenization to ensure maximum transaction security.
 

U.S. accounted for a payment gateway market share of over 65% in 2023. In the U.S., payment gateways are increasingly adopting artificial intelligence to enhance fraud detection, streamline transactions, and provide personalized payment experiences, driving higher customer satisfaction and retention rates. For instance, in April 2024, Paysafe enhanced its offerings in the U.S. iGaming sector by launching Pay by Bank, a new payment solution aimed at streamlining the deposit process for online bettors. This innovative service enables users to log directly into their bank accounts at the cashiers of online sportsbooks, allowing for real-time funding of wagers.
 

In Europe, there is a significant shift towards open banking and integrated payment solutions, driven by regulatory changes like PSD2. This trend enables seamless transactions and enhanced customer experiences through improved data sharing, fostering competition among payment providers while ensuring security and compliance with strict regulatory frameworks across member states.
 

In the Asia-Pacific region, rapid urbanization and mobile penetration are fueling the demand for digital payment solutions. Payment gateways are increasingly adopting advanced technologies like AI and blockchain to enhance security, streamline transactions, and support diverse payment methods, including QR codes and digital wallets, catering to the region's diverse consumer base.