When a customer makes an online purchase from your ecommerce company, they probably don’t think twice about everything that is going on behind the scenes to facilitate and protect the transfer of funds. 

However, you as a business owner need to have at least a working knowledge of the gateway applications that facilitate the movement of funds from buyer to merchant. 

When deciding the best product to choose for your business, it is important to understand just what white-label integrations are as well as how they differ from the standard payment gateway API.

A basic definition

Before we do this, however, let’s start with a brief discussion of a general term. A payment gateway is a web application that comes into play after a customer has confirmed that they want to make a purchase on your checkout page. 

The job of this technical layer is to act as an intermediary between buyer and seller, screening and encrypting payment data and sending it to the issuing and acquiring banks and card networks. 

After the various players in the process examine the information, a determination is made and the customer is notified about whether the payment has been accepted or declined. Amazingly, the entire process is accomplished in a matter of seconds.

Some payment gateway API companies create their product from scratch. This enables them to customize the product to meet a business’s unique needs and gel with their specific brand and client base. 

As you might imagine, developing this type of product requires technical expertise as well as a significant investment of time and financial resources.

White-label payment gateways defined

By contrast, some gateway software does not require the same degree of tailor-made attention. 

In many respects, these white-label payment gateway products offer the best of both the bespoke and the turn-key, allowing merchants to attach their own branding onto a pre-set package of payment processing software.

How do white-label payment gateways work?

Most vendors choose to offer these gateways to their business customers for rent on a subscription basis. And even though this technology itself is pre-fabricated, you as a merchant need to be intentional in choosing the prebuilt solution that is right for your company.

Your first task after arriving at your chosen white-label payment gateway system is to set it up properly. To that end, your vendor will furnish you with the software you need. In return, you can give feedback to the vendor as to your specific brand’s style and presentation.

Next, you need to look through the list of the payment providers and banks that your gateway vendor has integrated into the system. Decide which ones you want to use based on your customers’ location and payment preferences. 

If you would like to accept payments with institutions and entities that are not already included, ask the provider if it is possible to add them.

The next vital component is staff training. Although these systems are designed with ease of use in mind, be sure that all personnel are comfortable with the various features and that all questions have been answered to everyone’s satisfaction.

As a business owner, you are well aware that security must be one of your highest priorities. Fortunately, your white-label payment gateway comes equipped with a robust set of anti-fraud payment filters and screening tools. 

Because your gateway company can customize these to be compatible with your business’s geographical location, industry and level of risk, be sure that you discuss your specific needs and preferences with them. 

Finally, be sure that your billing and invoicing settings have been configured to match with your company’s goals and customer preferences.

Benefits of a white-label payment gateway

Ease and affordability are the two most prominent advantages of white-label payment gateways. Instead of paying a developer anywhere from $150,000 to $500,000 to create a solution for you, the white-label option only requires a monthly subscription payment. 

Better still, your provider will remain responsible for regular maintenance and security upgrades as part of the agreement, helping to keep your ongoing fees to a minimum.

What’s more, your white-label solution can be up and running in a matter of one to two weeks. Contrast that with the many months required to construct your own, and the choice is clear for many merchants.

Next, your white-label gateway gives you a wide variety of integrated and credit card providers included in the package. You can even offer digital and alternative payment methods like cryptocurrency via one simple integration into your platform.

Your provider can also set your system up with compelling advanced features. These include smart routing that chooses the most appropriate payment provider for each transaction, cascading to reduce payment declinations, tokenization for added data security, anti-fraud filters, smart billing and simplified reconciliation.

Finally, you do not need to bear the direct burden of complying with the Payment Card Industry Data Security Standard (PCI DSS), the set of measures developed by the credit card companies to protect cardholder data. 

That’s because your software vendor will maintain compliance and provide you with documentation of PCI compliance certification on an annual basis.

White-label payment gateway drawbacks

In spite of their upsides, white-label payment gateways are not for everyone. Their customizability is limited to some extent, giving you no control over the source code and making it impossible for you to make design or development changes on your own.

Instead, you must depend on the vendor to meet your gateway software needs in terms of security, technology and scalability. This underscores the importance of choosing a well-renowned provider who makes customer support and quality products a strong component of their mission.

Being able to furnish your customers with the optimal shopping experience requires that their payments are as streamlined, flexible and secure as possible. Finding a reputable white-label payment gateway provider gives you a safe, branded payment application without the expense or technical expertise required to develop a custom-made API solution. 

Even though your clients may never know what occurs in the background at checkout, choosing an excellent white-label payment gateway will enhance their checkout experience and help to give them a positive lasting impression of your store.