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How Seamless is Your Gateway's API Integration Experience?

By Daryl Seaman, TSG Senior Associate. Daryl has nearly 40 years of experience as an Information Technology leader and, most recently, was CIO for SphereCommerce.

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The future is bright for digital payments – growth is expected to continue unabated through at least 2030. Studies (including TSG studies like this) show that most consumers are willing to try new payment methods. 

Gen Z, the first generation to grow up with smartphones in their hands, is coming of age in the consumer market and will be trendsetters in payment innovation. They are entirely comfortable trying out new payment technologies, and we can expect the same from the generations that follow. 

Increase Developer Engagement  

Payments companies need to be ready to take advantage of this growth in both payments volume and innovation. One key way payments companies can stay relevant is to continually improve their integration methods, particularly APIs. The industry is demanding seamless integrations with payment gateways and processors. Recently, we analyzed 120+ payment gateways serving a variety of geographies & identified that 66% of gateways analyzed have open developer center pages with full access to their APIs (no credentials required); this share is up from 48% in 2020.   

Reviewing your APIs and comparing them to the industry is an excellent way to ensure you can continue to compete. You can use several benchmarks to improve your APIs. One of the most important is your API documentation. Developers are notoriously impatient; they don’t want to spend much time troubleshooting integration. You’ll be better off if you provide good detail and examples upfront. Ask yourself: 

  • Is your API documentation clear and concise to a new developer? 
  • Are there adequate code examples for the developer to follow? 
  • Do you provide a robust sandbox environment for testing? 
  • Does your support staff promptly answer questions and solve issues? 

You can increase developer engagement if you improve all these items. Your average new partner integration time is another benchmark to grade your integration process. Questions to ask yourself include: 

  • How long does your process take compared to industry leaders?  
  • What functionalities are available to automate or speed up onboarding?  
  • How fast are your transactions running once boarding is complete? 

Maintaining and growing market share depends on this. One of our GEM platform members recently tested their gateway’s transactions using the platform before boarding multiple large eCommerce merchants. They discovered transactions were taking an unacceptable 10+ seconds each. We also use GEM to analyze and score gateway APIs, including public APIs from major players. In the error handling category of our most recent analysis, the average gateway score was 5.23 out of 8, with the lowest gateway scoring 0, so there is room for improvement in this area. Addressing issues on the front end can help your business significantly. 

If you have a good view of your integration process and have received positive feedback from developers, we still recommend you compare your process to the industry every two to three years. This space changes quickly, and it is always helpful to get an outside view of how you are perceived in the industry. We have seen a wide range of performance across the market in our assessments, with lots of room for improving developer engagement. 

Barriers are Decreasing 

As the payments industry matures, there are more and more companies with the talent and experience to embed payments in their applications. As application developers get more comfortable with payment processing, they don’t have to hand off this activity to a third party.  While they may still connect a gateway to access payment networks, embedding payments lets them skip a lengthy integration. In some ways, embedded payments can threaten gateways since clients can go directly to processors. Services historically done by a gateway (tokenization, authorization, etc.) can be done directly within an app with embedded payments. One expected benefit of embedded payments is reduced checkout abandonment. Consumers don’t have to leave an app to make a payment. Clearly, embedded payments are poised for significant growth in the coming years.  

Despite growth in embedded payments, traditional gateways will likely see positive gains for the foreseeable future, given their market presence. The companies that invest in improving integration to provide the most seamless experience for the technology-sophisticated consumer will be positioned to reap the benefits of the payments journey well into the future. 

We can help you evaluate, benchmark, and improve your developer experience. Payments companies that use GEM to monitor and improve this process can increase customer retention by 5% or more. 

Contact us to learn more about the GEM platform.