Abstract
With margins on transaction switching thinning, gateway operators are
increasingly competing on features at both the edge of the network and within
their own data centers. Client-side code and devices are one avenue.
Smartphone-based APIs and iPhone "sleds" for magstripe card payments are
examples. And in the core of the network, a growing lists of payment services
add value to traditional transaction switching through increased security,
lowered risk and programmatic access.
In a new report, Gateway Providers Look Toward the Cloud: There' ll Be a Lot of
Company Up There, Mercator Advisory Group examines the future of payment
gateways and the expanding set of services they offer to ISOs, software VARs,
merchants and payment service providers. The report also analyzes the growing
cadre of competitors in the gateway market.
"The simple gateway is moving from its switching roots to a far more
sophisticated platform for delivering payment-related services," said George
Peabody, Director of Mercator Advisory Group' s Emerging Technologies Advisory
Service and principal analyst on the report. "Given the attractions of the
payments industry, new entrants are arriving and existing players are
expanding the services they offer to attract, in particular, two important
markets: software VARs and merchants. The security models of cloud-based
service delivery are about to get some serious exercise."
Highlights of the report include:
- Gateway services providers have fought the margin battle for payment
switching to a standstill.
- Margins are tight and the game is all about increasing volume through
broader channel supportMargins for gateway providers will come increasingly
through offering multiple services to their merchant and sales channel
partners.
- Advanced features that directly meet merchant concerns include card number
tokenization and token "vaulting", and recurring payment management. More
traditional services include support for signature capture, fraud controls and
rewards programs.
- Support for App Phones, especially the iPhone, is almost universally
considered a requirement by pureplay gateway providersGateway services lend
themselves to cloud-based operation.
- Implications include growing competition from non-traditional providers as
well as a heightened focus on the security posture of cloud-based services.
One of 6 exhibits in this report
This report contains 22 pages, 6 exhibits.
Companies and programs mentioned in this report include: Authorize.Net,
CyberSource, First Data, TSYS, Chase Paymentech, Apriva, MagTek, Intuit, Way
Systems, MerchantLink, Micros, IP Commerce, ProPay, Miva, Shopsite, Amazon,
TNS, Mercury Payment Systems, USA ePay, Charge Anywhere, and eProcessing
Network, Litle & Company, VeriFone, Semtek, PayPal, Square, Inc., mFoundry,
Google, and Salesforce .
