One of the great things about the digital world is the added convenience one gets when performing tasks, and a great way to see this is through online payments. Said digital methods are facilitated by gateways, which include both the traditional and the white label payment gateway, according to Tranzzo.
The latter of the two is worth discussing as, for a variety of reasons, many would go this route as opposed to the alternative, which makes one wonder why.
Here, it is important to delve into such payment methods, getting into what they are and why any business would consider choosing them over the alternative.
Below I have mentioned some proven benefits of offering a white label payment gateway to your online customers!
Payment System Basic Ideas
When the term white-label product is used in any situation, the implication is that a business brands something made by another creator as its own; a service that creators offer, of course. The idea of a white label payment gateway follows the same model and sees an organization use third-party organizations’ payment processing systems as their own by putting their brand on it.
The basic idea is that the entity using this service won’t have to create its gateway from square one. This means that all major aspects of the solution regarding technical elements, compliance and security are left to the vendor, while the following are left to the service-seeking entity:
- Branding
- Customization of interface
- Customization of user experience
How it Breaks From The Norm
Now, your standard payment gateway and the traditional alternatives ultimately have the same goal, which is to secure transactions, as well as make them smooth. That said, these two, which are part of the multi-trillion dollar digital payments processing industry, have several differences, and they’re as follows:
- The traditional variety maintains its brand, while the latter uses that of the customer
- Elements of security and compliance are handled already by the traditional variety, while entities using this exact label product have to make sure of this themselves
- The traditional variety, while containing customization options, has them in a limited capacity compared to this method
- The traditional variety’s pricing model is more predictable than the alternative because customization is limited and price doesn’t depend on number of features included
- Customer support in the traditional variety comes from service providers, while in the white-label alternative, it is taken care of directly by the business
Why It Is Worth Having
While the above differences may hint at why a WL payment gateway may be one worth pursuing, it’s best to look at the specific benefits of going down this path. The most obvious is the ability to customize according to what the business wants its potential customers to experience.
Furthering the brand into the organization’s payment system allows for customer retention, as they have an experience that can be tailored to them. In addition to this, being able to customize your gateway allows you to separate your organization from its rivals, making it more notable. Another reason to use these third-party vendor creations is the relatively low amount of time it can take to put one into use.
Development of such systems is no easy feat and will take quite a bit of time, but if you use the gateway, not a second will be spent on a complete build from scratch. What’s interesting, the U.S. private label industry increased from 17.7% of consumer products to nearly 19% in 2023, which means that the revenues increased from $176B to around $236B during this period. Instead, all else will go into customization, allowing for a situation in which customers can use the convenient method quickly.
Adapting to Market Changes With New Solutions
Another reason to use these third-party services ties into the last point and focuses on the cost of a complete, square-one gateway build. These take time and money, with the clear logic being that what you save in time spent will also translate in terms of money, as none of the infrastructure nor technology investment will be needed.
This is accompanied by a sense of scalability, which makes it so that if the business wants to tackle increasing amounts of transactions on their platform, they can allow for it. Flexibility can also be looked at as a major benefit of this type of payment gateways. This is seen in the fact that as the business landscape changes, any organization holding this solution can easily adapt to such changes as a result of the control that they allow.
Who’s Benefiting From This?
This is a great question and some of the answers seem obvious, while others may surprise you. The most obvious answer would be entrepreneurs and small businesses especially when you think of the quick deployment and relative affordability of these gateways. They gain a sophisticated system for much less than they otherwise would, giving potential customers a sense of variety, much like larger groups.
A less obvious answer would be banks and similar financial institutions, as it would seem that they could manage to build something from scratch. That said, they could still benefit from the gateways in question, especially as it pertains to interactions with customers, who would prefer an experience that’s more specific to them.
The final group that would benefit from the services in question are the payment service providers. How they would benefit from using third-party vendors to provide their services to them is the customization element. This allows them to stand out among rivals and, as the above has shown, retain customers who appreciate the customization.
Final Thoughts
If you’re an organization or entity that’s looking to maximize profits by giving your customers alternative payment methods, specifically gateways, you could go several ways about it. The purpose of this blog post is to show you that a white label payment gateway is a good choice for some reasons. These range from its relative affordability and time-sensitive nature regarding deployment to its ability to be customized.
What’s more, they are suitable for use by varying entities such as small businesses and financial institutions. These gateways are great tools to have in this day and age, or at the very least, they’re worth thinking about.
