Payment gateways are critical to the growth of any online business, especially e-commerce. Unfortunately, today's e-commerce environment is plagued by slow payment processes and a complicated checkout process—both leading to high abandonment rates. Therefore, e-commerce platforms strive to provide a hassle-free checkout experience to reduce abandonment rates. In this article, we'll discuss some leading payment gateway providers in the global and regional markets. We have analyzed the TPV growth of PayPal, Square, Razorpay, Adyen, and Stripe over the past four years and the pre- and post-pandemic growth numbers.
PayPal is among the largest payment gateway businesses in the world. Currently, it serves 33 million merchant accounts, processes ~18 billion transactions, caters to 416 million active users, operates in more than 200 countries, and supports 25 currencies. PayPal provides not only a digital wallet and payment gateway but also payout links, QR code service, money transfer service, business accounts, and business analytics and marketing tools for individuals and businesses. As per the latest data from Datanyze, PayPal ranks first in the payments processing market and holds 48.26% of the market share. Today, more than 430k companies use PayPal software. PayPal claims that its PayPal Checkout is used by 75% of the top 1,500 retailers in North America and Europe.
PayPal's TPV hit $906 billion in the first three quarters of 2021, and it doubled between 2018 and 2021. Further, while PayPal's quarterly TPV increased between Q1 2019 and Q4 2019, it declined in Q1 2020 due to the COVID-19 pandemic. Quarterly TPV saw an upward trend in Q2 2021, but it fell flat in Q3 2021. Moreover, post-pandemic TPV QoQ growth (between Q1 2021 and Q3 2021) saw a downward trend.
PayPal believes its core products—QR code payments and one-click online checkout products—contributed massively to business growth during the COVID-19 pandemic. PayPal Merchant Services’ TPV registered a 33% YoY growth in 2020, up from 27% YoY growth in 2019.
Square is one of the top POS players in the US, with operations in Canada, Australia, the UK, Japan, Ireland, and France. It enables small and mid-size businesses to accept credit card payments and use tablets as POS terminals. Using Square, merchants can create a simple omnichannel solution without coding or integrating with third parties. The company offers multiple products, including Square POS, Square store, payment APIs, Square Online Checkout, Square Payroll, Square Invoices, Square Loyalty, Square Card, Square Loans, and the Cash app.
Square's Gross Payment Volume (GPV) reached $121 billion in the first three quarters of 2021, surpassing the $112 billion mark in 2020. In 2020, the company’s YoY growth hit an all-time low at 6% due to the pandemic. Further, mid-market sellers (key contributors to Square's GPV) accounted for 37% of the total GPV in Q3 2021, up from 28% in 2019. As per the company's recent Q3 report, Square Invoices has processed $12 billion in GPV over the past 12 months, up nearly 2x from two years ago.
Stripe is another leading checkout platform in the US and the world. Currently, it has approximately 3.2 million clients spread in more than 120 countries. Stripe offerings include Stripe Connect, Stripe Billing, Stripe Payouts, and Stripe Treasury. As per data from Datanyze, Stripe ranks second in the payments processing market and accounts for 16.51% of the market share. More than 147k companies use Stripe software.
As per a CB Insights report, Stripe registered an impressive 133% YoY growth in GPV, growing from $150 billion in 2019 to $350 billion in 2020. Among the leading payments platforms, Stripe posted the highest growth rate in 2020. As per MEDICI estimates, Stripe’s GPV touched nearly $500 billion in 2021, which grew ~48% YoY.
Adyen, a leading acquirer and payment gateway business in Europe, provides a modern end-to-end payments platform integrated with Visa, Mastercard. The company delivers frictionless payments across online, mobile, and in-store channels. Adyen has offices worldwide, and its customers include Facebook, Uber, Spotify, Casper, Bonobos, and L'Oreal.
In H1 2021, Adyen processed $246 billion in TPV, up 67% YoY. Adyen's processed volume growth in H1 2021 surpassed growth numbers in H2 2020. A 23% YoY growth indicates that the pandemic-driven shift to digital payment continues to gain traction. In addition, POS volume doubled YoY, reaching $26 billion and accounting for 11% of total processed volume. In H1 2021, the company registered strong TPV growth because of new partnerships, the addition of big brands to the network, and expansion into new markets such as Asia and the Middle East. Compared with H1 2019, Adyen’s payment volume more than doubled in H1 2021, and it has been on an upward trend since H1 2020.
Razorpay is one of the largest and fastest-growing payment gateways in India. Currently, the company serves more than 8 million customers, and it plans to add 32 million customers by 2025. Its clientele includes Facebook, Ola, Zomato, Swiggy, Cred, Muthoot Finance, National Pension System, and Indian Oil. Razorpay launched a payment gateway product in early 2015, and later, it released multiple products and features to cater to customers across industries. Razorpay’s offerings include payment gateway, payment links, invoices, subscriptions, instant settlement, Smart Collect, payout links, RazorpayX (business banking suite), payroll, and tax payments. Recently, it launched MAGIC Checkout, RazorpayX Tax Payment Suite, and Razorpay Rize to help businesses, startups, and SMEs improve their overall payment experience and business growth.
Razorpay has been on a growth trajectory since 2018, and it has registered significant growth in terms of payment transactions, revenue generation, and customer base. Solutions that help businesses scale up and the launch of innovative products and features are instrumental to the success of Razorpay. The COVID-19 pandemic has further boosted the payments industry, as many MSMEs and merchant stores have migrated to the online space to continue their operations. The company onboarded 1.5 million MSMEs between March 2020 and May 2021.
As of December 2021, Razorpay processed nearly $60 billion in TPV. Its TPV grew 300% YoY for two consecutive years (2019–2020 and 2020–2021). Further, the company expects to register $90 billion in TPV by 2022.
Between 2018 and 2019, Razorpay saw a 500% increase in merchant signups. MSME customers increased 5x, from 200k in 2019 to more than 1 million in 2020.
Leading payment gateway providers have transformed into full-stack payment providers. Today, they offer online store creation services, no-code tools, loans, business accounts, payroll, marketing, analytics, and campaign tools to businesses across verticals in order to compete with other players. Some markets are ruled by local players, while several global players are eying other industry verticals and new markets, especially APAC and Europe. The strategic acquisition of regional players helps global players increase their market share. PayU, for example, has acquired BillDesk, one of India's largest payment gateway providers, to expand its business.
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