What Is a White Label Payment Gateway?

what is white label payment gateway

If you’re comparing payment gateway services, you’ve inevitably stumbled upon companies offering ‘white label payment gateway’ services. This type of service can be a godsend for the right type of business, but it’s not for everyone. So the question remains: Exactly what is a white label payment gateway?

What Is a White Label Payment Gateway?

A white label payment gateway is a solution that allows you to extend payment processing services to your customers under your own name. It has all the features of a traditional payment gateway—e.g. You can accept and process credit card payments in various currencies. But a white label gateway takes things one step further by allowing you to offer these same services to your own customers.

Let’s say, for example, that you operate your own ecommerce website builder. With a traditional payment gateway, you can accept payments online for everyone who uses your platform to build and host their business website. But if you use a white label gateway, you can also enable those customers to accept credit card payments on the ecommerce sites they build. Best of all, you get a small piece of every sale they make.

What Businesses Benefit From a White Label Payment Gateway?

If you own a small online fashion boutique, you probably have no use for a white label payment gateway. This type of service is intended for merchants who have reason to offer their own merchant services, such as:

  • Turnkey business providers. If you help to build online businesses—particularly ecommerce businesses—for aspiring entrepreneurs, you’ll need a way for your customers to easily process payments. White label casinos and gaming platforms are a popular example; businesses build online gaming platforms and then rent or sell them to entrepreneurs for profit.
  • Multi-level marketing businesses. If your business depends on customers selling your product on your behalf, a white label payment gateway can enable you to set up each customer with their own store.
  • Other types of resellers. If your business functions as a Value Added Reseller (VAR), Independent Software Vendor (ISV), Independent Sales Organisation (ISO), or other type of reseller, a white label solution might be right for you.
  • Aspiring payment gateway providers. Often, the gateway itself can be the business. If you like how a particular payment gateway operates but you believe you can market it more effectively, you can build your own website and promote the gateway under your own name and branding. The white label provider will still earn the bulk of the profit, but you’ll gain a small commission for something you technically had no part in building. Think of it like a really high-tech affiliate service.
  • Businesses seeking white label credit card processing. Many white label payment gateways make it possible for you to offer credit cards to your customers, complete with your company logo. If you’ve ever been asked to sign up for a credit card at your favourite department store, you’ve seen this process first-hand. Your customers can use the card wherever they shop (while gaining perks each time they shop with you), and you earn money with each swipe.

If your customers would benefit from receiving payment processing capabilities as part of your service, a white label gateway might be for you.

What Are the Benefits of Using a White Label Payment Gateway?

With a white label payment gateway:

  • You gain access to an additional passive revenue stream not available to most businesses.
  • You can gain a competitive edge in your industry by offering greater freedom and convenience to your customers
  • You establish added credibility by using your own name and logo for payment processing services—as opposed to pointing customers to a third-party provider.
  • You still have access to all of the gateway’s merchant features, such as payment processing, encryption, and fraud detection.

What Are the Drawbacks of Using a White Label Payment Gateway?

White label payment gateways do have their downsides.

  • If you don’t need white label services, the gateway may be needlessly cost-prohibitive.
  • Most white label payment gateways are difficult to customise. So even though you’re technically in control, you may have few options in terms of how the checkout experience looks and functions.
  • By using the gateway as your own, you’re putting your name and reputation at stake. You have to be hyper-diligent about maintaining total PCI compliance and fighting fraud, because any functionality issues or data breaches will reflect on your business and may even render you vulnerable to fines, lawsuits, and other punitive actions.

How to Choose a White Label Payment Gateway?

Certain essential features are specific to white label gateways. For example:

  • Ensure that the provider sells all of their gateway services directly to merchants—this should include the full breadth of services, including customer support and fraud prevention tools.
  • Ensure that the provider allows you to market their services under your own name. If they extend their services to your customers but they require you to retain their name and branding, they’re not a true white label gateway.
  • Ensure that the provider offers some customisation freedom. Ideally, you should be able to customise your logo, checkout page, URL, colours, fonts, and other embellishments so that everything remains consistent with your brand.
  • Ensure that the basic infrastructure is already built; this includes design, functionality, and security. You should be able to easily integrate the solution on behalf of your customers using a simple API or plug-in.

In addition, certain features are critical for any payment gateway, white label or otherwise. These features include:

  • A trusted reputation
  • Total PCI DSS compliance and enhanced encryption
  • Multi-currency support
  • Support for recurring payments
  • Fraud detection and chargeback mitigation tools
  • Round-the-clock merchant support
  • Compatibility with your shopping cart platform

If your business requires reseller services, consider the advantages of a white label payment gateway. However, if your product or service doesn’t necessitate secondhand payment processing, you’re usually better off with a traditional payment gateway like the type provided by Unicorn Group.