Merchants around the globe are continuing to embrace e-commerce to achieve meaningful sales growth. According to a Statista report, in 2022 retail e-commerce sales amounted to approximately 5.7 trillion U.S. dollars worldwide. This figure is forecast to grow by 56 percent over the four years, reaching about 8.1 trillion dollars by 2026.
Meanwhile, the lines between digital and physical shopping are increasingly blurred, with services like click-and-collect serving as a perfect example. This is borne out by another report which predicted that click-and-collect is expected to account for nearly 11% of UK online retail sales by 2025, as it outperforms the overall online market, growing by over 50% between 2020 and 2025. No matter the region, opportunities for the global expansion of sales is top of mind for savvy enterprises.
With consumers increasingly demanding a wider range of payment options and currency choices, and a better, more secure, frictionless shopping experience, merchants are under growing pressure to deliver an omnichannel experience that ensures both e-commerce and card-present transactions that are completed quickly and easily. Any disruptions to that purchasing experience can result in lost sales opportunities, creating a competitive disadvantage for the business.
At the core of the omnichannel payment process is the payment gateway.
What is a Payment Gateway and Why Does it Matter?
A payment gateway is a backbone for e-commerce and card-present point-of-sale transactions, providing different interfaces for authorisation and settlement of various payment methods and related services. Much as its name suggests, a gateway is the entry point for merchants to connect to the payment processing cycle. The gateway also offers security functionality, helping to prevent fraud in cooperation with other security systems and platforms.
Gateways are taking on ever-greater importance for e-commerce and card-present transactions as preference for digital payments expands. Indicative of this growth, a recent report predicts the global payment gateway market will reach $106.4 billion by 2030, growing at a CAGR of 16.8% from 2022 to 2030.
Merchants should care about gateways because they are vital to facilitating secure, fast, and reliable transactions, which are crucial for good commerce and a superior customer payment experience. Gateways become even more important during peak transaction periods, such as Black Friday, Cyber Monday, and year-end holiday shopping periods. During these times, stable performance is essential for processing high volumes of transactions flawlessly. Any delays in these transactions can have serious implications for sales. And as sales expand across borders, having a robust gateway that can facilitate those transactions in a wide range of currencies, is absolutely essential.
Ensuring Transactions are Secure is a Key Gateway Function
Gateways also serve the important function of ensuring greater security around transactions. This is particularly important to merchants who are obligated to remain in compliance with Payment Card Industry Data Security Standard (PCI DSS) security standards. PCI DSS was designed to ensure that all companies that accept, process, store or transmit payment card information maintain a secure environment throughout the transaction process.
In addition to ensuring compliance with the standards around accepting, transmitting, or storing cardholder data, PCI DSS also covers all of the technical and operational requirements merchants must exercise to protect sensitive cardholder data. One of the many benefits of a robust gateway is that merchants using value-added services, such as hosted payment pages can avoid going through PCI DSS compliance certification because all sensitive card data is hosted on the provider’s secure servers. And since the merchant does not have access to or have to store cardholder and card details on their own servers, there is less risk that the data will be compromised.
Criteria for Choosing the Right Gateway
As merchants look to deliver an omnichannel shopping experience for their customers, choosing the right gateway to support that experience is key. Some of the criteria merchants should consider when evaluating that choice include:
- Convenient access to acquiring capabilities
- Extensive geographic reach and global capabilities
- Local purchasing experience in regions important to the business
- Scalability to meet growing needs
- Multi-currency processing capabilities
- Access to value-added services, such as fraud prevention, currency conversion, tokenisation, cardholder authentication
- API connectivity
- Reliability with nearly flawless availability and uptime
- Fast processing speed and low latency
These are just some of the attributes that should be considered when merchants do their due diligence. Choosing the right gateway is foundational to ensuring the business will be well positioned for growth.
A Robust, globally capable approach to payments
A robust, globally capable payments gateway is essential for merchants looking to expand online sales around the world. Carat offers a proven gateway solution that can meet the needs of any merchant, regardless of the size, reach or complexity of their business.
The Carat Gateway acts as a single source provider for acquiring across the globe. The Carat Gateway offers both ecommerce and card present capabilities, including processing on standard POS terminals and next generation POS services, such as Soft Point-of-Sale in Poland. The Carat Gateway empowers merchants to offer a local and familiar purchasing experience in countries that matter the most to a business’s customer-base. In fact, The Carat Gateway currently processes several billion transactions per year worldwide.
Meeting Global Growth Goals
A good example of the flexibility offered by the Carat Gateway can be found in the case of a large European supermarket chain with a global expansion strategy. This merchant wanted to grow its business in APAC and North America, and we were able to facilitate this through the Carat Gateway which they were already connected to in EMEA. The overwhelming success of these implementations has led to further expansion into the UK, Ireland, the Netherlands, and Hungary.
Amongst the many advantages of the Carat Gateway is its geographic reach, offering multi-merchant/multi location processing capabilities, as well as multicurrency processing that accepts more than 70 local payment methods. The Carat Gateway is a truly global solution serving retailers worldwide through data centres in Germany for the EMEA region, in India for APAC, in Nebraska and Arizona for North America, and centres in Brazil and Argentina for LatinAmerica. The Carat Gateway’s consolidated collection model simplifies operational efforts across countries, currencies, and local payment methods (LPMs).
The Carat Gateway is also versatile, providing different interfaces for authorisation and settlement of various payment methods and related services, such as Clover® and mobile POS. This solution offers some of the highest Transactions Per Second (TPS) speeds and lowest latency in the industry with response times ranging around 24 milliseconds for API transactions, 28 milliseconds for Virtual Terminal, and 141 milliseconds for Hosted Payment Pages.
Leveraging Next-gen Connectivity
API connectivity was particularly important in the case of a major retailer based in EMEA. The organisation was planning to target online growth in APAC and North America, making the use of SOAP API integration, which proved instrumental in allowing the company to quickly, easily, and securely conduct online payment transactions in these new regions. As a result, the company was able to dramatically increase sales growth.
By leveraging Carat, merchants can access Fiserv payment processing platforms and value-added services, as such as fraud prevention, currency conversion, tokenisation, and cardholder authentication. The Carat Gateway also facilitates simple integration using SOAP and REST APIs, a redirect solution for direct consumer interaction, hosted payment form options, as well as a Virtual Terminal to run transactions manually.
As risk is always top of mind for merchants, The Carat Gateway fully encrypts all databases, and utilises security algorithms and tokenisation, as well as Transport Layer Security (TLS) cryptographic protocols to ensure the highest level of security.
The Carat Gateway is fully PCI DSS compliant, which in turn removes the burden from the merchants who no longer have to keep sensitive card and customer information on their servers.
As merchants increasingly focus on the importance of delivering an omnichannel experience for customers, the need for a global gateway is clear. Choosing a highly stable, highly reliable gateway that ensures the security and speed of transactions in a multitude of countries and currencies is paramount. The Carat Gateway offer a range of services and integration options that can deliver a competitive advantage for merchants. And in today’s global marketplace, that is something no business can live without.