Are integrated payment gateways becoming overcomplicated? Small and medium sized businesses (SMBs) think so, and they’re migrating to cloud based alternatives because of it.
According to our online payments preference study, the Grid Report, there is a dynamic in the relationship shared by e-commerce businesses and customers; the awareness they share for security risks when submitting payment information online. This highlights an interesting trend showing a migration to newer, cloud based payment gateway solutions rather than sticking with established, integrated on premises options.
Eighty-six percent of the reviewers in this report are affiliated with SMBs. This data point makes it easier to understand the preference for cloud based options rather than processing card information on their own servers. Companies of this size are less likely to have the same resources to implement and maintain an integrated PCI 3.0 compliant gateway on their own.
Businesses of this size are less concerned with the technical aspects of data security than they are about increasing customer conversion rates at checkout. And when it comes to online payment processing, they want to contribute minimal effort to the technical implementation of the gateway and instead focus efforts on ensuring that the new cloud based solution is seamlessly embedded into the company’s commerce experience.
This explains the rapid growth of payment gateways that promote their solutions for their embeddable design, which are popular among e-commerce SMBs. These products provide a simple, cloud based option that doesn’t require extensive administration or redirect customers away from an e-commerce business’ website to complete the payment.
This sentiment towards older, more complicated payment gateways is echoed by reviewers who migrated to newer products like Braintree and Stripe for their simplicity.
PCI 3.0 compliance among G2 Crowd reviewers is almost regarded as a checkbox since non-compliance can be disastrous, while customizability is the primary concern among these users. Customizability ensures that the payment solution has the same look and feel as the rest of the shopping experience and operates seamlessly with the check out process.
Even though these easy to implement, embeddable cloud based options have grown impressive customer rosters in the past few years, other more established gateways on the market shouldn’t be forgotten.
Several users cited integrated payment gateways’ reputation for security as the main reason for using or switching to them. However, more than 60% of reviewers of these older, on premises options work for large enterprise companies.
It’s safe to say that the trends among SMBs and new payment processors haven’t quite been disruptive enough to change the tools enterprise businesses use to handle online payments. But as these products evolve with the changing customer expectations, it will be interesting to watch how market share shifts.
Jed Fudally is a specialist at G2 Crowd.