01 November 2022, 2:30 (CET)

WHITE-LABEL PAYMENTS

What white-label alternative payment solutions offer


There are a variety of reasons a business might choose to outsource some part of its workload, and all of them apply to handling alternative payments. Card fees between the EU and UK rose from 0.3% to 1.5%1 in April 2022, costing merchants in the EU $202 million more each year. As a result, the appetite for no-charge alternative payments is greater than ever.
White-label services are the hidden backbone of the payments industry. As Open Banking and payment APIs continue to evolve at a pace, these white-label services give PSPs and merchants an affordable way to give their customers the best possible service. But in order to choose the right white-label alternative payments provider for your business, it’s crucial to understand the ins and outs of white-labeling.


Shortcuts

  • What is a white-label alternative payment solution?
  • Benefits of white-label alternative payment products
  • How to choose a white-label alternative payments partner

What is a white-label alternative payment solution?

A white-label alternative payment solution allows PSPs and merchants to process alternative payment methods (such as account-to-account payments) through a dedicated third-party provider while using their own branding. In other words, a white-label product or service is one that’s been developed by one company to be sold by another. White-labelling comes with different depths of integration. A relatively ‘shallow’ integration may only redirect customers to an external payments product with some light branding from the merchant, whereas a full integration will be totally seamless—unless they’re reading the legal documentation, a customer won’t even know the payments system is provided by a third party.

Benefits of White-Label Alternative Payment Products

Integrating a white-label payments solution comes with a variety of benefits, and understanding what a well-developed white-label product is meant to do can help a business choose the right product and level of integration for them.

#1: Customer experience

When an end-consumer is redirected to a different website to make a payment they’re liable to feel dissatisfied with the experience, even suspicious. Studies have found that 87% of shoppers are likely to abandon their carts if the checkout process is too difficult, and 55% would never return to that site.2

With a white-label approach, businesses can fully integrate and embed a payments solution into their platform, creating a seamless customer journey and reducing cart abandonment. Because the experience is vastly improved, and white-labelling allows companies to brand the service as their own, trust and customer stickiness also increase.

#2: Security

Developing payments software with sufficient security protocols is a significant undertaking requiring considerable resources to build and maintain. Most companies simply aren’t able to do it themselves without risking their customers’ data and their own reputations.

White-label alternative payment solutions let businesses take advantage of specialised software developed and updated in accordance with security protocols and regulation. Not only do users benefit from the specialist knowledge of the white-label provider, but also the data returned from other merchants and PSPs. Fraud and chargebacks are a constant concern for anyone relying on card payments, but outsourcing the risk to a white-label provider of alternative solutions such as account-to-account payments can greatly reduce the risk.

#3:  Cost-Effectiveness

While creating products in-house might sound like a good idea, businesses frequently underestimate the effort and resources that go into creating an alternative payments solution—not to mention the time.

White-label solutions are effectively plug and play. They allow companies to launch pre-developed and tested products without delays or bugs, and they’re comparatively much cheaper. While there are some benefits to building your own integration solution, such as near-infinite flexibility, they come at a cost that for most businesses simply isn’t worth the tradeoff.

 

How to choose a white label alternative payments partner

While choosing the best white-label alternative payments provider depends on a business’ specific priorities and requirements, the first thing to look for is a robust product that uses an advanced API, as well as a potential partner's SEPA compliance validation. As a service provider, they will have access to customers' sensitive information, which makes it imperative to make sure they’re fully compliant according to DSGVO/GDPR.

For the best value, look for providers that integrate risk and mandate management in one solution, and make sure to research their reputation and track record with other customers. Are they continually improving their product in line with customer feedback? If not, they might not be able or willing to meet your businesses specific needs.

While these are useful tips, they won’t help you decide exactly the kind of white-label integration you need for your business. For that, take a look at the table below and match it to your priorities.


INTEGRATION LEVEL DESCRIPTIONPROSCONS
Minimal White-Labelling Essentially a referral program where the platform sends customers to the service provider
  • Cheap
  • Quick to Launch
  • Benefit from other users’ learnings
  • High Security
  • Minimal Branding
  • Relatively poor customer journey
  • Inflexible
App/DashboardAn app embedded into the platform with some residual branding from service provider
  • Still relatively cheap
  • Quick to Launch
  • Benefit from other users’ learnings
  • Improved customer journey
  • Not totally seamless
  • Less likely to make updates for smaller clients
Super-Embedded Full integration. Customers unlikely to know it’s white-label
  • Very flexible
  • Fully branded
  • Tailored updates
  • Expensive
  • Slow to launch
  • Potentially less secure, depending on provider
  • Fewer shared learnings
Self-developed Building an alternative payments solution in-house
  • Fully flexible
  • Fully branded
  • Total control over updates
  • Very Expensive
  • Slow to launch
  • High risk
  • Regulatory liability
  • Additional hiring for maintenance
As with any software product, the best way to find the right white-label alternative payments solution for you is to book a demo and see how it works in practice.

Final Thoughts

The more time merchants spend trying to develop their payments systems, the less time they have to focus on their core business, and without an effective payments system, merchants are unlikely to reach their full potential. The solution is clear: A white-label alternative payments solution like the ones developed by SEPAexpress takes the risk and hard work out of payments, and lets merchants and PSPs focus on what they do best.

With a white-label solution, businesses are able to offer—and take credit for—a best-in-class product without the associated costs. That’s why PSPs, subscription-based merchants, traditional insurers, and Insurtech businesses all use SEPAexpress’ white-label products to meet their payments needs. Follow the link here for more..

SEPAexpress provides trusted and seamless, white-labeled account-to-account (A2A) payments including Direct Debit, Open Banking and the soon to come Request to pay for Payments Service Providers (PSPs) and merchants in Europe.

 

1 NOVALNET – Augustine, Jose (2022, 16.February): Rise In Card Interchange Fee 2022: What Merchants In Europe Need to Know. [online]
https://www.novalnet.com/blog/rise-in-card-interchange-fee-2022-what-merchants-in-europe-need-to-know/ [05.10.2022]

2 RETAILDIVE – Renfrow, Jaqueline (2018, 13.August): Most shoppers abandon their purchase if checkout is too hard. [online]
https://www.retaildive.com/news/most-shoppers-abandon-their-purchase-if-checkout-is-too-hard/529959/ [05.10.2022]

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Sabrina Jaksche

Content & PR


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Sabrina Jaksche

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SEPAexpress

b4payment GmbH
Osterhofener Straße 16
D-93055 Regensburg
Germany