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the disappearing line between payment gateways and processors

There's a New Tsunami on the Horizon

The line between card-not-present and card-present merchants is disappearing and, in doing so, creating both an abundance of new opportunities and of unexpected challenges.

After a tsunami of e-commerce supported by the payment gateway revolution in the last two decades, there is a new tsunami on the horizon. Supermarkets, restaurants, hotels and sports shops that once relied solely on POS payments have embraced a large number of new digital channels which resulted in a channel explosion.

This, in turn, resulted in the need to pay more attention to the customer journey which led to the line between the card-present merchants using processors and card-not-present merchants using payment gateways, to start disappearing.

What Does Omnichannel Experience Mean?

An omnichannel experience is the ability to recognize each single customer journey in order to make it better and more effective for merchants.

Payment gateway processing digital channels and payment switches processing in-store and similar channels separately do not allow merchants to create a unified view of their customers. The blending of gateways and processors is promising the possibility of an omnichannel.

The old-guard processors are being forced to expand their services into the payment gateway industry while independent payment gateways find themselves forced to broaden their offer with card processing services.

This however does not solve the problems for merchants in need of an omnichannel experience, since processors still publish ungainly APIs, that can be hundreds of pages long despite admittedly full of functionality.

The new guard, on the other hand, has developer communities in mind when it offers brief and easy to implement APIs, albeit quite often less rich in features and functionality.

The only facts that the new tsunami in the payment industry is bringing are: even better encryption, more standardization, like Interchange+, and a growth in the trend of pricing influence of payment gateways on all merchants.

GI Insight's report The Omnichannel Imperative found that in the UK, 71% of customer journeys begins online and yet just 42% of customers typically buy via the web, while 18% customer journeys start with a visit to a shop but 31% of customers end up purchasing in-store.