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Data for today’s episode is provided by Mercator Advisory Group’s report –Gateways Become Rising Force in U.S. Payments Industry, Part 1: A Market Overview
Payment Gateways Growth Correlates with e-Commerce Sales and COVID-19 Fallout:
- Over the past decade, U.S. e-commerce sales reached almost $900 billion in gross dollar volume (GDV), or 15% of total retail and travel sales.
- Between 2015 and 2019, the compound annual growth rate (CAGR) for e-commerce was 18.7%.
- Mercator anticipates a 17% increase in e-commerce retail from 2019 to 2020, despite a 75% decline in online travel sales (air, hotel, booking).
- Mercator believes it will take 3-4 years for online travel sales to return to 2019 levels.
- ACI Worldwide reported a year-over-year increase of 35% in online sales in the U.S. (comparing June 2019 and June 2020).
- Mastercard saw U.S. e-commerce sales for April and May increase to 22% of retail sales, up from 11% in 2019. This represents an incremental $53 billion in online retail spending.
About Report
Payment gateways are the fastest growing part of the payments industry’s value chain and have become disruptive forces that in some instances supplant legacy payments players such as merchant acquirers and processors. Payment gateways are a high growth and an intensely competitive category within the U.S. payments industry, offering both core and added-value services aimed at both consumer and B2B online merchants. A new research report from Mercator Advisory Group, Gateways Become Rising Force in U.S. Payments Industry, Part 1: A Market Overview, provides analysis and insight on the current state of the U.S. payments gateway market, supported by a Mercator Advisory Group e-commerce sales data forecast.
“E-commerce has been the driving force in the rise of payment gateways. These firms are lean and nimble, with the DNA of fintechs. Gateways serve online merchants, enabling them to accept card payments across borders and in multiple currencies for both consumers and B2B. With a crowded field of competing gateways, merchants face a daunting task of choosing from this large vendor category that serves the U.S. market with an ever-expanding array of payment solutions,” commented Raymond Pucci, Director, Merchant Services Practice at Mercator Advisory Group, the author of this report.