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Acquirers paying for online payment-gateway services have seen their average cost per transaction decrease over time, a recent analysis by First Annapolis Consulting found. One acquirer, which First Annapolis did not name, saw its average gateway cost per transaction fall to 1.5 cents in 2008 from 3.5 cents in 2000. "Many acquirers currently view gateways as 'expense tollbooths' that erode their transaction revenue and have thus likely forced price reductions on gateway services," analyst Steve Sion noted in his report. His research also found a wide range between the lowest and highest per-transaction costs. The likely cause is some gateways bundling services, such as online reports, data-security and fraud-prevention measures, into their offerings, Sion said. "In this manner, the premium gateways generate more revenue per transaction in today's environment despite overall declining costs," he said.
