Payment gateway costs for ecommerce merchants are going up. One of the reasons for this is compliance. Governments across the world are putting in place huge amount of laws for compliance, anti-fraud, anti-money laundering and anti-terrorism. 20 years ago no one talked about compliance and now, the only thing banks and payment gateways talk about is compliance. Why is this happening?

Lots of new regulation:

There is huge burden being put on payment gateways to know their customers and help with the battle online against fraud and money laundering. This means payment gateways are very hesitant to sign up new customers and have to also bring on new staff and costly IT systems to manage these risks. Naturally due to the high costs for compliance, payment gateways are either passing on these costs to customers or just stopping to do business with customers in the “high risk” category.

Geographic Risk

Nowadays a payment gateways needs to be global. This means they have to deal with lawyers in 20-30 countries, as well as with different geographic and legal risks. In order to reduce these risks they are spending huge amounts on legal costs, regulatory costs and local compliance officers. This again is leading to fees going higher in the ecommerce space.