The Average Payment Gateway
What Payment Gateways do
Payment gateways play an essential role in the processing of a credit card transaction. When you swipe your credit card or make an online purchase, a payment gateway takes payment card data and securely sends it to a payment processor for authorization.
The transaction information is then submitted to one of the credit card networks and routed to the issuing bank of the credit card holder where the transaction is either approved or declined. The response is then transmitted in reverse back to the payment gateway where it receives the response and notifies the merchant whether or not the transaction was approved or declined.
How they do it
Payment gateways provide tools and interfaces that allow merchants to collect credit card transaction information from their customers. This can be done in a variety of different ways. Many payment gateways provide APIs that allow websites, point-of-sale devices, business software and even mobile applications to integrate and send transactions directly to the gateway for authorization. They also provide virtual terminal capabilities that enable credit card information to be entered directly into a webpage form that can submit a transaction.
Payment gateways also come with a suite of value-added features that make managing a merchant’s transactions and business easier. These services can include recurring billing, fraud detection, reporting, PCI compliance, tokenization, and more.
Payment Gateways and Merchant Acquirers
Many payment gateways partner with merchant acquirers or independent sales organizations (ISOs) to resell their payment gateway services to merchants. A merchant acquirer, or an ISO, is a company that sells merchant services and employs a sales team to promote their services to merchants. Since it doesn’t make sense for most merchant acquirers to build and maintain their own payment gateway technology, they often enter into reseller agreement relationships with payment gateways to promote and resell their payment gateway services.
Now, there is an exciting alternative to this established and antiquated system of reselling and promoting someone else’s payment gateway and brand; one that gives merchant acquirers or ISOs more control over their customer relationships while also helping to differentiate their business from other merchant acquirers or ISOs with whom they compete for business. This is where the white label payment gateway opportunity comes in.
White Label Payment Gateways
How they Work
White label payment gateways offer similar features and functionality and also perform the same important role as regular payment gateways, however, there are some major differences and advantages with white label payment gateways. While regular gateways contract with merchant acquirers or ISOs to resell their payment gateway’s brand, white label payment gateways allow, and even prefer, the merchant acquirer or ISO to brand and sell the payment gateway services as their own. They get to use their own company logo, customize the look and feel to match their brand and service their customers in a way they see fit. In essence, why would a merchant acquirer or ISO resell someone else’s payment gateway, when they can be the payment gateway themselves.
Benefits of White Labeling
Becoming a provider of payment gateway services, rather than merely a reseller, offers unique opportunities. As a provider of a white label service, you can set your own margins and become a more active part of the revenue stream. It also means you get to build your own brand, market your own business and improve your own visibility, rather than someone else’s. You can also control your customer experience by providing them with the service and support they need to be successful using your payment gateway.
When you use a white label payment gateway service, you enjoy the following benefits:
- You don’t have to build or maintain the service yourself, so heavy lifting like security, compliance, and infrastructure are already taken care of for you.
- Access to the platform’s processor connections and shopping cart integrations allow you to provide solutions to a broader group of merchants and service their needs.
- You have ultimate control over your customer relationships, which means you can determine how the gateway technology will be sold and serviced.
- The effort you and your team put into promoting the payment gateway technology enhances your brand’s value and reputation.
- Using a white label payment gateway strengthens the relationship you have with your merchants and puts you in the powerful position to meet, and even exceed, their needs.
Who do they Partner with?
One of the first things you need to know is if you’re the kind of business that could benefit from white label payment gateway services. There are four types of resellers that best fit the white label payment gateway model:
- Independent Sales Organizations (or ISOs)
- Independent Software Vendors (ISVs)
- Value-Added Resellers (VARs)
- Pay-Facs (like PayPal or Square)
You should choose a white label payment gateway platform that has a long track record of experience working with these kinds of businesses.
Finding a Quality White Label Partner
To make the most of your white label payment gateway experience, it’s important to find the right provider that gives you what you need, so in turn, you can meet the needs of your merchants. To do that, you’re going to have to ask a few questions:
- Will you have access to training materials and support services?
- Is the payment gateway platform easy and intuitive to use?
- How reliable is the payment gateway platform?
- How secure is the payment gateway platform?
- Does the white label gateway provider sell their services directly to merchants?
What Branding Options are Available?
You’re going to need a flexible and customizable platform to truly make the payment gateway service your own, so be sure to ask what branding options are available that will allow you to fully brand the payment gateway the way you want. Here is a short list of a few things you’ll want to have full branding control over:
- Color scheme
- Marketing collateral
- Login portal
Asking about the customizability of these features will help you know beforehand if the provider offers the level of control you’re looking for.
What Types of Merchants can be put on the Gateway?
The correct answer is “anyone you want,” but not every provider necessarily agrees. Make sure that the payment gateway offers you the freedom to board the merchants you want to do business with and provide services to the vertical(s) you do business in.
You will also want to ask about payment gateway’s third-party integrations, API functionality, and SDKs. Other important considerations include:
- Who is responsible for billing the merchant?
- Who manages the SSL certificate?
- Who owns the domain name?
- How is customer support for the merchant handled?
- What shopping carts are you integrated to?
- What types of merchants can I put on the platform?
Keep in mind, the best white label payment gateways will offer killer features like the ability to recruit agents and other companies to resell your rebranded gateway. So keep an eye out for the showstoppers like a hierarchical structure and Multi-MID capabilities.
If you’re ready to ditch the established and antiquated system of reselling and become more involved in meeting the needs of your merchants, start looking for a white label payment gateway. It will give you the freedom to promote your own brand, and increased control over your customer experience.
For more information about white label payment gateways, and how they can help you jumpstart your business, contact NMI today.
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