Surveying the Capabilities of Card-Not-Present Gateways in U.S. Merchant Acquiring
First Annapolis recently completed a study of the CNP Gateway market in the U.S. As part of the study, First Annapolis analyzed the capabilities of several gateways which we estimate serve over 85% of the U.S. e-commerce merchant market. Our analysis focused on common gateway features and functionality as summarized in Figure 1. Some notable findings included the following:
- All of the gateways analyzed offer credit card processing, virtual terminal, CVV/AVS, online reporting, and multi-merchant / single sign-on to the gateway platform.
- With only one exception, all of the gateways offer recurring billing and basic / advanced transaction query capabilities.
- Only 63% of the gateways studied were capable of integrating with multiple card processors.
- Very few gateways offer EBT and HSA card processing.
- Mobile payment acceptance is becoming an increasingly common offering among CNP gateways, with only 16% of the gateways we analyzed not having adopted a mobile offering yet.
The study seems to indicate that basic gateway services (i.e., credit card processing, virtual terminal, basic security features and traditional reporting features) are “must haves” for gateway providers that serve the general small merchant population. On the other hand, advanced features and functionality such as level III processing, EBT, HSA and gift card processing, and installment billing, address the needs of a narrower and more sophisticated merchant market, and therefore are offered only by gateways targeting those merchant segments.
Figure 1: Percent of CNP Gateways Offering Feature/Functionality
Source: First Annapolis Consulting research and analysis.
For more information, please contact Scott Calliham, Principal specializing in Merchant Acquiring,firstname.lastname@example.org; or Janinne Dall’Orto, Senior Manager specializing in Merchant Acquiring,email@example.com
To read the rest of this article, please subscribe to