A white label payment gateway is a gateway that has partnered with multiple merchants to offer its services. A white label payment gateway offers many benefits to its merchant partners, such as allowing the partner to have their branding on the login and website pages. In addition, it allows merchants to work with more providers that would otherwise be too tedious to maintain relationships with. Companies often choose white label payment gateway providers for these benefits.
However, there are a few disadvantages to this that partners should be aware of as well. Since the merchant is sharing a backend with other merchants, they lose control over their system and data, which could cause issues when trying to manually process transactions, e.g., refunds or chargebacks. They also may lose out on investing in their technology and services.
What is the White Label Payment Gateway?
Businesses or agents can use a white label payment gateway as it offers an online shop for companies that don’t want to open their sites. White label service providers are responsible for building, marketing, and managing their clients’ payment pages.
White label payment gateways offer several benefits to companies without brand recognition or with a large enough client base to warrant investing in their e-commerce site. Typically white label providers make more money off transactions than individual merchants, so they can afford to cut deals with companies seeking white label payment services.
Pros and Cons of White Label Payment Gateway
The following points explain the White Label Payment Gateway Pros & Cons:
- One account to manage multiple eCommerce stores
- Access hundreds of free website templates through their extensive library
- No in-house technical skills are required to build and customize a site
- All the back-office functions such as accounting and fraud management are taken care of
- Access to a large number of shopping carts and eCommerce platforms
- Hosting and security services are taken care of by the service provider, saving money for their customers.
- Cost per transaction is generally higher than merchant account providers
- No direct access to customers’ transactions data or insights (however, the white label provider would have all the data)
- Difficult to change payment service providers in the future
Various Types of White Label Payment Gateways:
1) Basic White Labelling: Merchants can place their branding on the payment pages and include custom features by working with their partners.
2) Full White Labelling: This allows merchants to use their branding, customizations, and features without impacting the services offered by the payment gateway provider.
White label service providers are responsible for building, marketing, and managing clients’ payment pages. The products they provide can be used for a wide range of online payment methods, including credit cards or PayPal.
3) Fully White-Label Service: This allows merchants to use their branding, customizations, and features without impacting the services offered by the payment gateway provider. Merchants have full access to customer data and can process transactions in any currency.
4) Partial White Labelling: Merchants can place their branding on a few pages, including checkout. This is generally not recommended for merchants as it may impact conversion rates and brand recognition.
5) Low-level White Labelling: This allows merchants to place their branding, customizations, or features in only certain areas of the payment page.
6) High-level White Labelling: This allows merchants to place their branding, customizations, or features in a high level of the payment pages.
7) No White Labelling: This allows merchants to use their branding and features without impacting the services offered by the payment gateway provider. Merchants have full access to customer data and can process transactions in any currency.
White label providers have a lucrative business model where they earn a commission on every transaction processed by merchants using their service. They can offer white label solutions at lower costs than merchant account providers that have to recover the costs of setting up and providing merchant accounts.
Challenges Faced By White Label Payment Gateways:
- Building Trust with Customers
- Service Provider Issues such as technical support, uptime, and lack of transparency
- Low Availability of Skilled Developer and Technical Support Resources in India.
- Difficulty in providing service if new features are required.
What is a Merchant Account?
It is a set of tools and services that help merchants to accept credit cards, debit cards, and electronic checks from their online customers.
Different Types of Merchant Accounts:
1) Standard Merchant Account: This offers access to all products and features on the payment gateway.
2) High-Risk Merchant Account: This is generally suitable for businesses that deal with dating, gaming, and pharmacy.
3) Recurring Billing Accounts: Merchants can offer subscription-based or recurring billing services to their customers.
4) Prepaid Merchant Account: This is suitable for accepting funds from customers in advance by using a prepaid card.
5) High Volume Merchant Account: This is suitable for businesses that process large amounts of transactions per month.
Challenges Faced By Merchant Account?
- Payment Gateway Integration and Hosting Issues
- Maintenance, Support, and Fees charged by the providers
- Large setup fees relative to White Label products
White Label providers are more suitable for businesses that have less complex payment requirements. On the other hand, Merchant Account providers offer greater value with the convenience of a managed service and experienced technical support. These solutions can be used to accept payments for both physical products as well as online services.