As integrated-payments competition intensifies, payment gateways are responding by making it easier for developers to access and use vital technical information. Indeed, more gateways—65% of them—analyzed in The Strawhecker Group’s annual Payment Gateway Directory, sponsored by MCAG, have open developer-center pages. This compares with 48% that did so in 2020. The directory includes data on 110 payment gateways, up from 100 in the 2020 directory.
“Having public, ‘hands-free’ developer [application programming interface] and supporting documentation online is a must-have for a gateway to be competitive in today’s payment-technology environment,” says Cliff Gray, senior associate at Omaha, Neb.-based Strawhecker. “The Stripe model is an exemplar of this strategy.”
Gateways form a crucial component of electronic payments, especially as more and more transactions are made digitally. “High-functioning and efficient payment gateways are the backbone of the [e-commerce] payments ecosystem, and as they always have been, gateways will be tested this holiday season as they enable transactions for what will likely be the largest online shopping season thus far,” a Strawhecker blog post notes.
Payment gateways enable connections to multiple processors. They are popular for a variety of reasons, including consolidating access to many acquirers through one or two common integrations. In addition, their modern API interfaces are better-suited to developer audiences than “old-school” integrations into major processors, Gray says. And gateways, in their revenue-stream function, compete, act as, and cooperate with independent sales organizations and ISO sales models, he adds.
The gateway report also found that only 32% were either operated as or were subsidiaries of public companies. This may indicate that most of the gateway volume is handled by independently owned and operated organizations, the blog post says.