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Licensed for individual use onlyThe Forrester Wave : Merchant PaymentProviders, Q3 2020The 10 Providers That Matter Most And How They Stack Upby Lily VaronSeptember 23, 2020Why Read This ReportKey TakeawaysIn our 23-criterion evaluation of merchantpayment providers, we identified the 10 mostsignificant ones — ACI Worldwide, Adyen,Cybersource, Fiserv, Global Payments, J.P.Morgan, PayPal, Stripe, Worldline, and Worldpayfrom FIS — and researched, analyzed, andscored them. This report shows how eachprovider measures up and helps digital businessstrategy professionals select the right one fortheir needs.Stripe And Adyen Lead The PackForrester’s research uncovered a market in whichStripe and Adyen are Leaders; Fiserv, Worldpayfrom FIS, PayPal, Worldline, and J.P. Morgan areStrong Performers; and ACI Worldwide, GlobalPayments, and Cybersource are Contenders.Scale, Technology, And Speed Of InnovationAre Key DifferentiatorsGlobal merchants must balance scaleand localization, omnichannel merchantsseek consolidation and seamless paymentexperiences, and tech-forward merchants wantpayment vendors that keep up with the pace ofchange. Rarely can one payment vendor serve allof these needs perfectly today.This PDF is only licensed for individual use when downloaded from forrester.com or reprints.forrester.com. All other distribution prohibited.forrester.com
For eBusiness & Channel Strategy ProfessionalsThe Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack Upby Lily Varonwith Fiona Swerdlow, Sara Sjoblom, Nicole Murgia, and Nicole LesperanceSeptember 23, 2020Table Of ContentsRelated Research Documents2 Merchants Balance Cost, Scale, AndModernity In Payment ProvidersCOVID-19, Contactless Payments, And RetailerConcerns: The State Of Payments In The US3 Evaluation SummaryNow Tech: Merchant Payment Providers, Q3 20207 Vendor OfferingsState Of Alternative Payments Acceptance In USRetail7 Vendor ProfilesLeadersStrong PerformersContendersShare reports with colleagues.Enhance your membership withResearch Share.13 Evaluation OverviewVendor Inclusion Criteria14 Supplemental MaterialForrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA 1 617-613-6000 Fax: 1 617-613-5000 forrester.com 2020 Forrester Research, Inc. Opinions reflect judgment at the time and are subject to change. Forrester ,Technographics , Forrester Wave, TechRadar, and Total Economic Impact are trademarks of Forrester Research,Inc. All other trademarks are the property of their respective companies. Unauthorized copying or distributingis a violation of copyright law. Citations@forrester.com or 1 866-367-7378
For eBusiness & Channel Strategy ProfessionalsSeptember 23, 2020The Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack UpMerchants Balance Cost, Scale, And Modernity In Payment ProvidersPayments are the invisible invaluable. Invisible because the best payment experiences are quick,painless, and, increasingly, barely perceptible. Invaluable because merchants depend on payments,to, well, make money. The problem is that the payment landscape is especially complicated: ahodgepodge of old and new technologies, strict regulations, and a revolving door of new mandates,players, and operating models.Global merchants want to scale and localize payment acceptance. Omnichannel merchants wantto consolidate payment experiences for their customers. And technology-forward merchants wantto keep up with the pace of change. In response, the merchant payment processors have madesignificant mergers and acquisitions, overhauled architectures, and/or launched new products to meettheir merchant customer needs. As a merchant payment processing customer, you should look forproviders that:›› Meet your globalization needs. These vendors enable merchants to accept payment methodsacross the globe — some have offices in more than 30 countries. The question merchantsshould ask after the initial “Can we accept [payment method X]?” is “How are you getting thebest performance from [payment method X]?” Vendors are building better connections to, morerealistic testing environments with, and better insights practices around a larger set of paymentmethods, including non-card-based payment methods. And they’re doing the same around localbanks and payment schemes in more countries. For acquirers, cross-border settlements and fundsmanagement are also key to supporting global merchants.›› Support the payment flows that are important to your business. Payment acceptance, or “payins,” are the traditional payment flows that these vendors have supported. But as merchants adoptsubscription or marketplace business models, or they otherwise innovate on payments flows,vendors are adapting and expanding to support them. These vendors are bringing subscriptionmanagement, disbursements or payouts, and other capabilities into their offerings to supportmerchants’ varying payment flows.›› Match your pace technologically and regarding change. These vendors are building andenhancing their architectures and APIs to the latest specifications. Some vendors’ softwarearchitecture is especially well suited to iteration, while that of others is less so. Another area wherevendors’ pacing is important is in their adoption of, or adaptation to, ongoing industry innovationand regulatory changes or mandates. Some vendors move quickly, while others are more deliberatein rolling out new features. But the slower-to-innovate players are often also the biggest and, assuch, exert influence on the industry and the networks, sometimes on behalf of their customerbase. 2020 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.Citations@forrester.com or 1 866-367-73782
For eBusiness & Channel Strategy ProfessionalsSeptember 23, 2020The Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack UpEvaluation SummaryThe Forrester Wave evaluation highlights Leaders, Strong Performers, Contenders, and Challengers.It’s an assessment of the top vendors in the market and does not represent the entire vendorlandscape. You’ll find more information about this market in our report, “Now Tech: Merchant PaymentProviders, Q3 2020.”We intend this evaluation to be a starting point only and encourage clients to view product evaluationsand adapt criteria weightings using the Excel-based vendor comparison tool (see Figure 1 and seeFigure 2). Click the link at the beginning of this report on Forrester.com to download the tool. 2020 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.Citations@forrester.com or 1 866-367-73783
For eBusiness & Channel Strategy ProfessionalsSeptember 23, 2020The Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack UpFIGURE 1 Forrester Wave : Merchant Payment Providers, Q3 2020Merchant Payment ProvidersQ3 rongercurrentofferingStripeAdyenWorldpay from FISWorldlinePayPalGlobal PaymentsFiservJ.P. MorganACI WorldwideCybersourceWeakercurrentofferingWeaker strategyStronger strategyMarket presence 2020 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.Citations@forrester.com or 1 866-367-73784
For eBusiness & Channel Strategy ProfessionalsSeptember 23, 2020The Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack UpmentsorganWorldW lineofro rldpm ayFIS3.901.753.002.502.503.004.003.203.80Global 0Card payments Non-card or alternativepayments 0Omnichannel andin-person 0Tokenization 05.00Subscriptions andrecurring 3.003.005.003.003.00Payouts 3.005.00Currency managementand 03.003.003.003.003.003.003.003.003.00APIs and 03.00Updates and 03.003.00Developer tools .001.005.005.005.005.00Reporting,reconciliation, anddataFraud preventionyPlobaeStr ip2.15alPaay50%P.MJ.Current offeringlPGForw resei tegh r’stingACIWorldAdwidyeenCybersourFiceservFIGURE 2 Forrester Wave : Merchant Payment Providers Scorecard, Q3 2020All scores are based on a scale of 0 (weak) to 5 (strong). 2020 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.Citations@forrester.com or 1 866-367-73785
For eBusiness & Channel Strategy ProfessionalsSeptember 23, 2020The Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack UpmentsorganWorldW lineofro rldpm ayFIS4.003.004.002.403.203.604.203.403.00Product arket 03.003.003.00Innovation Supporting productsand 0Partner 00Market Total 01.005.00Number of 00yPlobaeStr ip3.20alPaay50%P.MJ.StrategylPGForw resei tegh r’stingACIWorldAdwidyeenCybersourFiceservFIGURE 2 Forrester Wave : Merchant Payment Providers Scorecard, Q3 2020 (Cont.)All scores are based on a scale of 0 (weak) to 5 (strong). 2020 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.Citations@forrester.com or 1 866-367-73786
For eBusiness & Channel Strategy ProfessionalsSeptember 23, 2020The Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack UpVendor OfferingsForrester included 10 vendors in this assessment: ACI Worldwide, Adyen, Cybersource, Fiserv, GlobalPayments, J.P. Morgan, PayPal, Stripe, Worldline, and Worldpay from FIS (see Figure 3).FIGURE 3 Evaluated Vendors And Product InformationVendorProduct evaluatedACI WorldwideACI Omni-Commerce Solution, ACI Secure eCommerce SolutionAdyenAdyenCybersourceCybersource Global Payment Management PlatformFiservFiserv PlatformGlobal PaymentsGlobal PaymentsJ.P. MorganJ.P. Morgan Merchant ServicesPayPalPayPal Commerce PlatformStripeStripe PaymentsWorldlineWorldline PlatformWorldpay from FISWorldpay from FISVendor ProfilesOur analysis uncovered the following strengths and weaknesses of individual vendors.Leaders›› Stripe delights tech-forward merchants and supports business model innovation. SanFrancisco-based Stripe is best known for its developer-friendly architecture, toolkits, anddocumentation. Its clear product portfolio explains each product line’s usefulness and impact for itscustomers. What stood out in this evaluation was Stripe’s tendency to “show, not tell” — via casestudies, data, and more. Its vision of “increasing the GDP of the internet” by supporting businessesas they adapt — to new geographies, new business models, and new disruptions — is well alignedto the realities that many merchants face. It is expanding the availability of its Stripe Terminaloffering outside Canada, Singapore, and the US, following its 2018 acquisition of point-of-sale(POS) software provider Index. 2020 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.Citations@forrester.com or 1 866-367-73787
For eBusiness & Channel Strategy ProfessionalsSeptember 23, 2020The Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack UpStripe’s product is built for and delights its target audience: tech-forward business pros. It isgood at using its data to build algorithms that improve authorization rates and retries of paymentfailures. Stripe is uniquely strong in subscription management, with a product that competeswith third-party tools for this purpose. It supports fewer payment methods and is farther behindsome competitors in supporting in-person payments. Reference customers unanimously citedits API design and documentation, as well as Stripe’s proactiveness, as strengths: “While someprocessors are still opportunity sizing the latest tech, Stripe has launched [them].” Reporting toolswere another strength: One reference customer described Stripe Sigma, its SQL querying tool, as“super powerful.” Stripe is a best fit for technology-forward payments teams or for digital-first ordigital-only merchants that are intent on innovating on their business model or are subscription orplatform/marketplace merchants.›› Adyen streamlines operations, integration, and iteration for omnichannel merchants. Upon itslaunch, Amsterdam-based Adyen’s “single platform, one integration” offering disrupted the market.This tech-forward focus on being a one-stop-shop for global omnichannel payments remainsits core strategy and strength. In addition to payments processing, Adyen offers direct acquiringacross multiple regions and a homegrown terminal software and hardware product. It’s also oftenahead of most players in this space on new industry innovations or mandates, like 3DS2.2 andnetwork tokenization. In 2018, eBay chose Adyen as its primary payments partner when it finalizedits separation from PayPal.Adyen’s omnichannel payments processing product and global acquiring footprint mean thatmerchants can avoid the operational headaches that a multi-back-end architecture creates, suchas numerous settlement file formats and multiple settlement cutoff times. It does so withoutlosing its tech focus, leveraging its data and machine learning to effectively boost authorizationrates. It’s built to simplify integration: For example, it offers four different integration options togive merchants varying levels of control. In some especially local payment markets (e.g., LatinAmerica), Adyen doesn’t always deliver the top success rates, payment method support, ormarket-level insights that merchants expect. But everything is relative: Reference customersvalidate that compared to other providers, Adyen supports “a wide variety” of payment methodsand “outperforms on authorization rates” in key markets. One reference customer said the “lowlevel integration makes it amazingly powerful for us to run our own experiments” — increasinglyimportant in an age of frequent “new normals.”1Strong Performers›› Fiserv’s scale and resources impress, but merchants have inconsistent experiences. Havingacquired First Data in 2019, Wisconsin-based Fiserv is the world’s largest payment processor. Assuch, its value-added services can be substantial: for example, its own debit networks and gift cardprocessing in more than 50 countries. Fiserv’s challenges are common to large companies: It’s slowto change or react, it has disjointed products and teams, and integrating acquisitions are works inprogress. But in the last two years, it has overhauled its organizational structure, contracting, and 2020 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.Citations@forrester.com or 1 866-367-73788
For eBusiness & Channel Strategy ProfessionalsSeptember 23, 2020The Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack Upclient success model to simplify doing business with it. It also has an eye on the future: Fiserv hasa sizable innovation budget and has helped merchants with newer payment experiences like onlineEBT acceptance, voice commerce, and scan-and-go in the grocery sector.Merchants choose Fiserv because of its global scale and broad set of capabilities. In many cases,they can work with Fiserv across the globe for all their needs. But the merchant experience canvary based on the products they’re using to process payments. For example, one referencecustomer cited Fiserv’s uptime as a core strength, while other customers have noted outages as acore issue. In terms of strengths, reference customers cited the company’s “financial health” andits “ability to handle scale.” They also wanted Fiserv to bring together the bank and processingsides of the business for better processing rates and to improve internal processes to meettimelines and react more quickly to incidents. Fiserv is best for enterprise-level merchants thatcan keep the company’s attention or retailers that use solution or gateway partners to integrate toaccess specific capabilities or global regions.›› Worldpay from FIS is generous with its expertise but has legacy tech, is slower to act.Jacksonville, Florida-based Worldpay from FIS is the result of several acquisitions since 2018.The integrated offering — POS payments from Vantiv, cross-border payments from Worldpay, andglobal banking and issuing relationships from FIS — holds the promise of a global omnichannelpayment offering with the efficiencies of better connections to global banks. Still, the entities havework to do to simplify their product portfolios and consolidate the experience of working acrosstechnologies for their merchant customers. Recently, the company launched Access Worldpay, asingle point of access to the various technologies in its portfolio, making it easier to integrate withand deploy its payment processing software.The company’s primary strength is its expertise and mastery of the regulatory landscape inpayments. It shines in supporting cross-border settlements and managing currency conversion.Better than most, it balances merchant regulatory compliance with flexible settlement schedulesand destinations. Its legacy architecture is a common pain point among its reference customers,as is its relative slowness to react — on planned enhancements, product launches, and forcustomer service. But what it lacks in nimbleness, it makes up for in its strategic support of itsclients. One reference customer called Worldpay from FIS “innovative in the way that they use theirexpertise — regulatory, vertical, commercial — to help us find solutions.” Another noted that its“strong reputation and relationships in the payments industry” were key. Worldpay from FIS is agood fit for global online merchants where settlement flexibility and currency management are keyrequirements.›› PayPal has a strong vision and a solid product with specific strengths. San Jose, Californiabased PayPal’s portfolio includes products for consumer payments (PayPal Wallet and Venmo),payment processing (PayPal Commerce Platform and Braintree), POS (iZettle), payouts (Hyperwallet),and fraud detection (Simility). In 2019, it acquired China-based gateway Guofubao InformationTechnology (GoPay). Core to its product vision is an ambitious plan to bring these products into an 2020 Forrester Research, Inc. Unauthorized copying or distributing is a violation of copyright law.Citations@forrester.com or 1 866-367-73789
For eBusiness & Channel Strategy ProfessionalsSeptember 23, 2020The Forrester Wave : Merchant Payment Providers, Q3 2020The 10 Providers That Matter Most And How They Stack Upintegrated but modular bundle, allowing merchants to choose only the capabilities they need, whilealso leveraging consumer data from PayPal Wallet and Venmo. Today, the lines of demarcation areunclear between its payment processing products. Enterprise firms may find it
change. rarely can one payment vendor serve all of these needs perfectly today. Why read This report in our 23-criterion evaluation of merchant payment providers, we identified the 10 most significant ones — Aci World
