Mastering White Label Payment Processing: A Comprehensive Guide

Today, it’s a given that e-commerce and digital payments have taken the world by storm. And while we might all know that it’s big, it’s worth asking: just how big is it?

To answer that, consider the fact that digital payment penetration is at 89%, meaning nearly 9 out of 10 Americans use digital payments in one form or another. What’s more, the global online payment market is projected to reach a whopping $15.17 trillion as early as 2027.

Clearly, digital payments are here to stay.

The industry is championed by the organizations like ISVs and SaaS companies, which in part keep growing by providing integrated payments. However, building the infrastructure to facilitate payments costs more than most companies can afford.

Enter white labeled payment processors.

Navigating the intricacies of white label payment processing requires a seasoned understanding of its nuances, benefits, and practical applications. In this comprehensive guide, we’ll explore everything from the fundamentals of white label payment gateways to the intricate decision-making processes involved in choosing the right provider. This includes a range of merchant services such as credit card processing, online payments, mobile payments, and POS systems that businesses can offer under their own brand without building their infrastructure.

By delving into the intricacies of white label payment processing, you are embarking on a journey toward comprehensive expertise in this specialized domain.

What is White Labeled Payment Processing?

We’ve previously talked about the differences between payment processing and a payment gateway, but here’s a quick summary in case you aren’t familiar.

A payment processor is a financial institution that takes care of your company’s online and in-person transactions, usually by providing the equipment you need to accept payments (generally a POS terminal).

On the other hand, a payment gateway is essentially an online POS terminal used for card not present (CNP) transactions, like phone purchases or online transactions. You need both a payment gateway and a payment processor to complete these transactions, but only a payment processor when you use your credit card or make a contactless payment using your card or phone in person.

With a white label payment processor, you would use a payment processing company to facilitate your payment. The difference is that now, you’d be able to fully customize the entire payment experience, aligning it with your brand identity.

From payment pages to dashboards, white labeled payment processing helps brands strengthen their relationship with their customers with a fully on-brand experience. Basically, this makes it possible for companies like ISVs and enterprise sized merchants to start facilitating payments themselves, all without actually being a payment processor (in other words, offering integrated payments). This allows businesses to resell payment processing services under their own brand without needing to develop their own payment infrastructure.

What is a White Label Payment Gateway?

To comprehend the realm of white label payment processing, one must first comprehend the concept of a white label payment gateway and its essential distinction from traditional payment gateways. While traditional payment gateways are typically associated with a specific payment service provider, a white label payment gateway can be rebranded and resold by various entities, allowing them to provide payment processing capabilities under their own brand.

A white label payment gateway is a fully developed payment gateway solution that businesses can customize to their requirements and rebrand as their own. It allows companies to offer seamless, secure, customized payment services without developing the technology from the beginning.

How it differs from traditional payment gateways

White label payment gateways and traditional payment gateways exhibit distinct differences that cater to varying business needs and preferences. Below are key differentiating points between these two payment gateway models:

Choosing the right payment gateway partner is crucial for ensuring secure online transactions and expanding your client base, whether on a national or international level.

White Label Payment Gateway:

• Rebranding: Can be rebranded and resold by various entities under their own brand, allowing for a personalized customer experience.
• Customization: Offers extensive customization options, enabling businesses to tailor payment solutions to their specific requirements and branding.
• Control: Provides businesses with a higher level of control over the user experience and payment process.
• Scalability: Allows for scalability and adaptability to accommodate evolving business needs and expansion.
• Cost Structure: May include setup fees and additional costs for customization, but can offer cost efficiencies in the long term.

Traditional Payment Gateway:

• Vendor Lock-In: Typically associated with a specific payment service provider, limiting flexibility and choice.
• Limited Customization: Offers standardized payment solutions with fewer customization options compared to white label gateways.
• Fixed Features: Often comes with a set package of features and functionalities, limiting adaptability for unique business needs.
• Costs: Usually charges monthly fees and per-transaction fees without setup costs, but may involve hidden fees or additional charges.
• Branding: Provides less room for branding and white-labeling, leading to a less personalized customer experience.

In summary, the choice between a white label payment gateway and a traditional payment gateway depends on factors such as customization requirements, branding preferences, cost considerations, and the level of control a business seeks in its payment processing solution.

How White Label Payment Gateways Work

White label payment gateways operate by providing businesses with a customizable payment processing solution that can be seamlessly integrated into their existing systems. Here are the key points that describe how white label payment gateways work:

• Reselling Opportunity: White label payment gateways can be rebranded and resold by various entities, allowing businesses to offer payment processing capabilities under their own brand.
• API Integration: They provide APIs (Application Programming Interfaces) that enable businesses to connect their systems with the payment gateway to send transaction requests and receive responses.
• Customization Options: White label payment gateways offer extensive customization capabilities, allowing businesses to match the payment process to their branding and user experience requirements.
• Payment Processing: They facilitate the secure transfer of payment information between the merchant, the customer, and the acquiring bank. This includes authorization, settlement, and reconciliation processes.
• Multiple Payment Methods: White label payment gateways support various payment methods, such as credit/debit cards, digital wallets, bank transfers, and more, providing businesses with flexibility to meet customer preferences.
• Online Payments: These gateways are designed to handle online payments efficiently, ensuring secure and seamless transactions for e-commerce and other digital platforms.
• Security and Compliance: They prioritize data security and regulatory compliance by implementing measures like encryption, secure tokenization, and adherence to industry standards such as PCI DSS compliance.
• Reporting and Analytics: White label payment gateways offer reporting tools and analytics to help businesses monitor their payment activity, track revenue, and gain insights into customer behavior.
• Customer Support: They typically provide customer support services to assist businesses and resolve any issues related to payment processing.

By leveraging these functionalities, white label payment gateways enable businesses to efficiently process payments, enhance their customer experience, and maintain control over their payment ecosystem.

If you’re ready to harness the benefits of partnering with a white label payment partner, there are a few factors you should be aware of to ensure you get the best out of your future partnership. Here are the top things to keep in mind:

Reliability and security

Remember, your customers (or sub-merchants) will be making and/or receiving payments via your platform. If something goes wrong, it’s your brand’s reputation on the line. To avoid any hiccups, find a partner that’ll put security and regulations front and center and will handle the underwriting and risk management for you.

If they’re PCI DSS compliant, you’ll be able to rest easy knowing they’re committed to protecting your data (and customers’ info) with state-of-the-art security measures. Other questions you should consider asking when shopping around include:

• What kind of anti-fraud, due diligence, and KYC measures do they have in place?
• Do they use safety measures like tokenization?

Flexible payment processing options

An excellent white labeled payment provider will have flexible options that will help you scale your SaaS company as needed. Whether you want to take ACH, split or recurring payments, or some other form of card-present or CNP payment, work with a provider that empowers you to create a customized payment strategy you can flawlessly integrate alongside your services.

Deep integrations with payment-related tools and services

If you start using a white labeled payment provider, you shouldn’t be expected to give up on everything you used before. By integrating white labeled payment methods into your current workflow of using tools like Xero, Monday.com, or Mailchimp, companies can better automate and streamline their workflow, leading to increased productivity and reduced costs. The end result? More time to focus on your business.