This rapid rate of change is therefore rewarding those payment gateways that are most agile and adaptive. From a technological standpoint, this means open platform architecture and streamlined processes, including automated merchant onboarding and self-service options. The ability to build additional services on a platform, supported by APIs and SDKs, is also important.
Increasingly, strategic partnerships with specialist technology providers are providing the answer, as gateway providers face hurdles in building it all alone. In the ‘build vs buy’ argument, buy is winning out. As a result of these partnerships, payment gateways can rapidly gain the agility and flexibility that their merchants demand. This is changing the nature of the payment gateway model, as these partners bring a range of value-added services to the table. These ‘on top’ services are increasingly the key to a payment gateway enhancing its proposition, and increasing merchant stickiness.
Global payment gateways need to consider value-added services
Payment service providers support merchants as they expand internationally by offering front-end card processing and relevant alternative payment methods through a single payment gateway, as well as enabling local and international acquiring. The proliferation of gateways in recent years has led to the commoditization of payment gateway services, which is another reason why value-added services are increasingly the differentiating factor.
Real-time fraud prevention backed by expert risk analysts (such as that offered by ACI ReD Shield), business intelligence, one-click and recurring payments, consolidated reporting and analysis, tokenization, loyalty and gift card programs, and mobile SDKs to name a few – these diverse value-added services have one commonality; they simplify and streamline merchants’ business operations by reducing the number of solution providers they need to deal with when going cross-border.
Because PSPs and ISOs work in different verticals, with different payment and risk needs, the value-added services that are most suitable or fit best within their proposition will vary substantially.
Another increasingly important differentiator for payment gateways is their integration with eCommerce or shop plugins. Whether SaaS-based (e.g. Shopify) or self-hosted (e.g. WooCommerce, Magento), plugin integration is another factor driving change in the payment gateway space.