Businesses are increasingly looking for ways to differentiate themselves, streamline processes and enhance the customer experience. One key area where these objectives intersect is payment processing.
According to a report by Polaris Market Research, the global payment processing solutions market was valued around US$74 billion in 2021 and is expected to reach more than US$192 billion by 2030. The size of the payment processing industry is a reflection of its business value and the diversity of needs that exist – it’s not the kind of function with a one-size-fits-all solution.
White-label payment gateways help businesses improve their payment experience and reshape the way that they conduct online transactions. Below, we’ll explore this technology and provide insight into the advantages of white-label payment gateways. Here's what you need to know.
What's in this article?
- What is a payment gateway?
- How do payment gateways work?
- What is a white-label payment gateway?
- What types of businesses use white-label payment gateways?
- Benefits of using a white-label payment gateway
- Choosing a white-label payment gateway
What is a payment gateway?
A payment gateway is a technology that businesses use to accept and process online payments. It acts as the bridge between a customer’s payment method – such as credit cards, digital wallets or bank transfers – and a business’s merchant account, transferring funds quickly and securely.
Payment gateways help ensure the security of transactions by encrypting sensitive information, such as card numbers and personal details. And alongside other players in the payment process, they contribute to verifying transaction authenticity to prevent fraud. Payment gateways also help authorise transactions, communicating with card issuers to confirm that customers have sufficient funds to complete their purchases.
How do payment gateways work?
The process of how a payment gateway works involves several basic steps:
- Initiation: The transaction is initiated when a customer decides to make a purchase and enters their payment information on the business’s website or app.
- Encryption: Once the customer submits their payment details, the web browser encrypts this data, typically using SSL encryption, for secure transmission. This encrypted data is then sent to the business’s server and, in the case of online transactions, onward to the payment gateway.
- Routing: The payment gateway sends the transaction information to the relevant payment processor, which then forwards it to the card issuer or the correct card network.
- Authorisation: The customer’s bank receives the authorisation request, verifies the availability of funds in the customer’s account, checks for any potential fraudulent activity and then sends a response back to the payment processor. This response is either an approval (if the funds are available and everything is correct) or a decline (if the funds are insufficient, the card has expired, etc.).
- Order fulfilment: The payment gateway forwards the authorisation to the business, which then fulfils the customer’s order. If the authorisation is declined, the customer is informed of the unsuccessful transaction.
- Settlement: The card issuer transfers the funds to the business’s account during a process known as "settlement", and the transaction is complete.
What is a white-label payment gateway?
A white-label payment gateway is a fully developed payment gateway solution that businesses can customise to their requirements and rebrand as their own. This model allows companies to offer seamless, secure, customised payment solutions without developing the technology from the beginning, which can be costly, time-consuming and fraught with technical challenges.
White-label payment gateways can support a wide array of payment methods, from credit and debit cards to digital wallets and bank transfers, giving businesses the flexibility to cater for the diverse preferences of their customer base. Additionally, these gateways can handle multiple currencies and languages, enabling businesses to expand their reach and access international markets.
What types of businesses use white-label payment gateways?
White-label payment gateways are a viable choice for various businesses, regardless of size or industry, particularly those looking to optimise their payment processes and enhance their brand presence. However, they are especially appealing to certain types of businesses, including:
E-commerce businesses
For e-commerce businesses, creating a smooth, simple payment process is important. White-label payment gateways allow these businesses to integrate a fully functional payment gateway that carries their branding, helping to enhance user experience and boost trust and loyalty.Software-as-a-Service (SaaS) providers
SaaS providers often integrate payment gateways into their software to facilitate recurring transactions. With a white-label payment gateway, they can provide a seamless, branded payment experience to their users.Banks and financial institutions
These businesses may choose to use a white-label payment gateway to offer their customers a secure, reliable and branded online payment solution, without needing to develop the technology in-house.Platforms and marketplaces
Online platforms and marketplaces, where multiple vendors sell their products or services, can benefit greatly from white-label payment gateways. These platforms can use the gateway to process payments securely, disburse funds to vendors and provide a consistent payment experience across all vendors.Startups and SMEs
For startups and small- to medium-sized enterprises (SMEs) that lack the resources or technical expertise to develop a payment gateway from the beginning, white-label solutions offer a cost-effective and time-efficient alternative.
Benefits of using a white-label payment gateway
While many businesses feel satisfied with unbranded payment gateways, there are advantages to white-label gateways that hold strong appeal. These include:
Control and customisation
By adopting a white-label payment gateway, businesses gain greater control over their payments infrastructure. This is not just about branding, although the ability to offer a payment solution under your brand name undoubtedly enhances brand consistency and trust. It’s also about tailoring the payment experience to the specific needs and preferences of your customers, as well as aligning it with your business operations and strategy.
For instance, you can customise the user interface to provide an easy and intuitive payment process, reduce friction and increase conversion rates. You can also integrate the gateway with your business systems – such as CRM, ERP and accounting software – to streamline operations and improve data visibility and accuracy.
Cost and time efficiency
Developing a payment gateway in-house is a complex and costly process that requires specialised technical expertise. Even after the gateway is up and running, there are ongoing costs and efforts associated with maintenance, updates, security, compliance and support.
White-label payment gateways, on the other hand, come ready-made. You don’t need to invest resources into development, and you don’t need to worry about maintenance and updates – the provider takes care of these aspects. This enables you to focus on your core business activities and use your resources more effectively.
Security and compliance
Customers need to trust that their sensitive data is protected, and businesses need to comply with rules and regulations, such as PCI DSS, GDPR and PSD2. These rules and regulations can often be complex and burdensome to comply with while building payments infrastructure, but compliance is necessary to avoid hefty fines and reputational damage.
White-label payment gateways are designed with security and compliance at their core. They employ advanced encryption technologies, fraud detection mechanisms and other security features to safeguard customer data. They are also built to comply with industry standards and regulations, taking this burden off your shoulders.
Choosing a white-label payment gateway
White-label payment gateways can offer tremendous benefits for businesses that thoughtfully choose a solution that fits their needs and aligns with their goals. Businesses should consider several factors when deciding whether to use a white-label payment gateway.
Business needs and objectives
First, you need to evaluate your business needs and objectives. Ask questions such as:
- Which payment methods do your customers prefer?
- Which currencies and languages do you need to support?
- Do you plan to expand into new markets?
- How important is branding in your payment process?
- How do you envision your payment experience?
The answers to these questions will help you to determine whether a white-label payment gateway is the right solution for your business – and if so, which features and capabilities you should look for.
Costs and benefits
Next, you should consider the costs and benefits. This is not just about comparing the costs of a white-label payment gateway with the costs of an in-house solution. It’s also about considering the benefits – such as enhanced customer experience, increased conversion rates, streamlined operations, improved data visibility and reduced risk – and quantifying them in terms of revenue, savings and strategic value.
Providers and products
Finally, you should research providers and products. There are many white-label payment gateway providers out there, each with their own strengths and weaknesses, product offerings, pricing models and customer support policies. Look for a provider that:
- Aligns with your business requirements and goals
- Has a strong track record in the industry
- Offers a robust and flexible product
- Provides excellent customer support
- Is transparent and fair in its pricing
A streamlined, intuitive and secure payments infrastructure is a baseline expectation of modern customers. White-label payment gateways offer businesses a way to deliver on these expectations, providing a fluid and customised payment experience, saving time and costs, enhancing security and compliance, and reinforcing brand identity.
Benefits of using a white-label payment gateway
While many businesses are satisfied with unbranded payment gateways, there are advantages to white-label gateways. These include:
Keeping payments under your branding: A white-label solution ensures a business’s brand remains prominent, removing third-party logos to maintain a professional identity throughout the checkout process.
Customizable user experience: Businesses gain total control over crucial elements, such as the layout, flow, and design of payment pages. This allows them to customize the UX and checkout flow according to their needs.
Smoother integration: Most modern white-label gateways use robust APIs and software development kits (SDKs) to ensure a high degree of connectivity with existing systems including accounting software and customer relationship management (CRM) tools.
Save time and development costs: Rather than building a proprietary solution from scratch, using a prebuilt white-label payment gateway can help a business launch a sophisticated payment platform in weeks rather than months.
Strong security and fraud protection: White-label payment solutions are equipped with advanced encryption and real-time threat monitoring to identify and block suspicious transactions before they can escalate.
Regulatory compliance: A white-label partner handles the heavy lifting of PCI DSS certification and regional data laws, helping a business remain fully compliant with less administrative overhead.
Control and customization
By adopting a white-label payment gateway, businesses gain greater control over their payments infrastructure on their websites. This is not just about branding, although the ability to offer a payment solution under your brand name undoubtedly enhances brand consistency and trust. It’s also about customizing the payment experience to the specific needs and preferences of your customers, as well as aligning it with your business operations and strategy.
For instance, you can customize the user interface to provide an easy and intuitive payment process, reduce friction, and increase conversion rates. You can also integrate the gateway with your business systems—such as CRM, ERP, and accounting software—to streamline operations and improve data visibility and accuracy.
Cost and time efficiency
Developing a payment gateway in-house is a complex and costly process that requires specialized technical expertise. Even after the gateway is up and running, there are ongoing costs and efforts associated with maintenance, updates, security, compliance, and support.
White-label payment gateways, on the other hand, come ready-made. You don’t need to invest resources into development, and you don’t need to worry about maintenance and updates—the provider takes care of these aspects. This enables you to focus on your core business activities and use your resources more effectively.
Security and compliance
Customers need to trust that their sensitive data is protected, and businesses need to comply with rules and regulations, such as PCI DSS, GDPR, and PSD2. These rules and regulations can often be complex and burdensome to comply with while building payments infrastructure, but compliance is necessary to avoid hefty fines and reputational damage.
White-label payment gateways are designed with security and compliance at their core. They employ advanced encryption technologies, fraud detection mechanisms, and other security features to safeguard customer data. They are also built to comply with industry standards and regulations, taking this burden off your shoulders.
Choosing a white-label payment gateway
White-label payment gateways can offer tremendous benefits for businesses that thoughtfully choose a solution that fits their needs and aligns with their goals. Businesses should consider several factors when deciding whether to use a white-label payment gateway for their website.
Business needs and objectives
First, you need to evaluate your business needs and objectives. Ask questions such as:
- Which payment methods do your customers prefer?
- Which currencies and languages do you need to support?
- Do you plan to expand into new markets?
- How important is branding in your payment process?
- How do you envision your payment experience?
The answers to these questions will help you determine whether a white-label payment gateway is the right solution for your business—and if so, which features and capabilities you should look for.
Costs and benefits
Next, you should consider the costs and benefits. This is not just about comparing the costs of a white-label payment gateway with the costs of an in-house solution. It’s also about considering the benefits—such as enhanced customer experience, increased conversion rates, streamlined operations, improved data visibility, and reduced risk—and quantifying them in terms of revenue, savings, and strategic value.
Providers and products
Finally, you should research providers and products. There are many white-label payment gateway providers out there, each with their own strengths and weaknesses, product offerings, pricing models, and customer support policies. Look for a provider that:
- Aligns with your business requirements and goals
- Has a strong track record in the industry
- Offers a robust and flexible product
- Provides excellent customer support
- Is transparent and fair in its pricing
A streamlined, intuitive, and secure payments infrastructure is a baseline expectation of modern customers. White-label payment gateways offer businesses a way to deliver on these expectations, providing a fluid and customized payment experience, saving time and costs, enhancing security and compliance, and reinforcing brand identity.
Checklist for choosing a white-label payment provider
Selecting a white-label payment gateway is a long-term infrastructure decision. Businesses should evaluate several factors before choosing a provider to ensure that the provider is a good fit for their brand, technical needs, and growth.
Verify compliance and regulatory standards: Ensure the provider maintains the highest tier of PCI DSS certification and adheres to regional data laws.
Audit supported payment methods: Confirm the gateway supports a global mix of credit and debit cards, digital wallets, and alternative payment methods.
Assess branding and UI flexibility: Verify that the user interface, cascading style sheet (CSS), and subdomains are fully customizable by the end user.
Analyze the full cost of ownership: Document the setup fees, monthly SaaS subscriptions, and any hidden costs for advanced features or technical support.
Test integration and system compatibility: Review documentation to ensure the gateway integrates smoothly with existing systems without a total backend overhaul.
Evaluate security and fraud tools: Look for a “security-first” architecture that includes tokenization, end-to-end encryption, and real-time fraud detection.
Review reporting and data access: Ensure that the gateway provides access to a robust, real-time dashboard that provides detailed transaction reporting and customer analytics for better business intelligence.
Confirm flexibility and performance: Research the provider’s historical uptime and confirm their infrastructure can handle traffic spikes as volume grows.
Gauge the quality of technical support: Evaluate whether customers have support 24 hours a day and dedicated account managers available to troubleshoot and resolve issues.
How Stripe Payments can help
Stripe Payments provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.
Stripe Payments can help you:
- Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.
- Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
- Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.
- Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.
- Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.
Learn more about how Stripe Payments can power your online and in-person payments, or get started today.
The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.