A Step-by-Step Guide to Setting Up a White Label Payment Gateway
Updated: Sep 13
Enter the world of white-label payment gateways – a game-changing solution that empowers companies to offer payment processing services under their brand.
In this blog post, we'll dive into the world of white-label payment gateway.
Table of contents:
What is a white-label payment gateway?
How does a white-label payment gateway work?
What are the benefits of using a white-label payment gateway?
Who can benefit from using a white-label payment gateway?
What is a payment gateway v/s payment processor?
What Is A White Label Payment Gateway?
A white-label payment gateway is a payment processing service that is rebranded by a company under its brand name. This allows businesses to offer online payment processing services to their customers without developing the payment infrastructure from scratch. Instead, they can leverage the technology and services of an established payment gateway provider and customize the solution to match their brand and requirements.
How Does A White-Label Payment Gateway Work?
Payment Processing Infrastructure: The white-label payment gateway provider has a fully functional payment processing infrastructure that includes connections to various payment methods, banks, and card networks. They handle the technical aspects of securely processing payments.
Branding and Customization: The business that wants to offer payment processing services under its brand can customize the payment gateway solution. This includes branding the user interface, incorporating their logo and color scheme, and making other design and user experience customizations.
Integration: The white label solution is integrated into the company's website, app, or platform, enabling customers to make payments seamlessly without leaving the company's environment.
Customer Support: Depending on the arrangement, customer support may be provided by the white-label payment gateway provider, or the business may handle customer inquiries and support itself.
Pricing and Revenue Sharing: The business and the white label provider typically have a revenue-sharing agreement. The business may pay a setup fee and transaction fees, and the revenue generated from payment processing is shared between the two parties.
Compliance and Security: The white-label payment gateway provider is responsible for ensuring that the payment processing solution complies with industry standards and regulations. This includes security measures to protect sensitive customer data.
What Are the Benefits of Using a White-Label Payment Gateway?
Benefits of using a white-label payment gateway include:
Faster time-to-market: Businesses can quickly offer payment processing services without the need for extensive development.
Brand consistency: The payment solution can be customized to align with the company's brand, maintaining a consistent user experience.
Reduced development and maintenance costs: Companies can avoid the costs and complexities associated with building and maintaining their payment infrastructure.
Expertise and reliability: White-label providers are typically experienced in payment processing and offer robust and reliable solutions.
Who Can Benefit From Using White-Label Payment Gateway?
A White-label payment gateway can benefit a wide range of businesses and organizations across various industries. Here's a breakdown of who can benefit from using these solutions:
E-commerce Platforms: White-label payment gateways can be used by online retailers and e-commerce to offer their customers an intuitive and unique payment process. This helps boost conversion rates, reducing cart abandonment, and increasing overall sales.
Software as a Service (SaaS) Providers: SaaS companies that offer subscription-based services can use white-label payment gateways to handle recurring payments and billing for their customers. It simplifies the payment process and enhances user experience.
Financial Institutions: Banks, credit unions, and other financial institutions can offer their customers white-label payment gateway solutions to facilitate online banking, bill payments, and fund transfers. This extends their digital banking services and enhances customer satisfaction.
Startups: Startups with limited resources can quickly enter the market and accept online payments by partnering with a white-label payment gateway provider. It reduces the development time and costs associated with building their payment infrastructure.
Small and Medium-sized Businesses (SMBs): SMBs in various industries can benefit from the affordability and scalability of white-label payment gateways. They can easily integrate these solutions into their websites or apps to accept payments from customers.
In summary, white-label payment gateway offers flexibility and scalability, making them suitable for a wide array of businesses and organizations seeking to streamline payment processing, enhance the user experience, and expand their services.
What Is A Payment Gateway vs. Payment Processor?
A payment gateway and a payment processor are two essential components in the process of facilitating online transactions, but they serve different purposes and perform distinct functions in the payment ecosystem.
Payment Gateway
A payment gateway is like a digital bridge between a merchant's website or point of sale (POS) system and the financial institutions that handle payments.
Its primary function is to securely transmit transaction data from the merchant to the payment processor and then return the transaction result to the merchant and the customer.
Payment gateways encrypt sensitive payment information (such as credit card details) to ensure secure transmission over the Internet.
They often provide features like fraud detection and prevention, address verification, and 3D Secure.
Payment gateways are customer-facing and typically provide the checkout interface where customers enter their payment information.
Payment Processor
A payment processor, referred to as a merchant acquirer, is a financial institution or service provider that handles the authorization, clearing, and settlement of payment transactions.
When a customer makes a payment, the payment processor communicates with the customer's issuing bank to verify if there are sufficient funds and if the transaction should be approved.
If the transaction is approved, the payment processor manages the transfer of funds from the customer's account to the merchant's account.
Payment processors also handle various backend processes, including batch processing of transactions, reporting, and reconciliation.
Payment processors are merchant-facing, meaning they work behind the scenes to facilitate the movement of funds.
In summary, a payment gateway is the front-end interface responsible for securely capturing and transmitting payment information, while a payment processor is the back-end entity that facilitates the actual movement of funds and communicates with banks to authorize and settle transactions. Together, they enable online and in-person payments to occur smoothly and securely. Many payment service providers offer both payment gateway and payment processing services as part of a comprehensive payment solution.
