White-label PSP & everything beginners should know about it

Payment service providers (PSPs) are companies that represent the vascular system of online payments. Thanks to their services, people can shop online, make and accept money transfers, subscribe and pay for services, etc., all of which have already become an integral part of our lives. No wonder the PSP market is growing so fast. It is forecasted to more than double from roughly $40 billion in 2019 to a staggering $88 billion in 2027. The numbers speak for themselves, making this market attractive to newcomers and increasingly competitive. A smart, low-investment entry point into this burgeoning market is through a white-label PSP.

What is a white-label PSP?

To flesh out the concept, let's split the term into two parts: white label and PSP.

• The white label model involves buying an unbranded solution from a producer, branding it, and selling it as your own. With this business model, a single product can be marketed by multiple vendors under different brands.
• PSP (payment service provider) is a company merchants choose to process their incoming and outgoing online transactions. It is a middleman between a customer, merchant, payment gateway, acquiring and issuing banks.

Altogether, a white-label payment service provider is an out-of-the-box solution that allows you to earn money by providing payment services to merchants under your brand. With a variety of features and pricing models, the market is ripe with choices for those looking to step into this role.

White-label PSP vs white-label payment gateway: is it the same?

The landscape of payment processing is dotted with terms like 'white-label PSP', 'white-label gateway', and 'white-label payment processor', which may be confusing for beginners. These terms are often used interchangeably, though subtle distinctions exist — people may use various terms to differentiate a company providing a service (payment processor) from the supplied software (payment gateway).

Besides, some companies may use different wording to name different offerings. For example, at Corefy, we offer two key solutions:

• White-label gateway — a solution for online businesses looking for a scalable, ready-made payment gateway to run their own payment processes.
• White-label processor — a solution for payment institutions which need a brandable technical infrastructure to work with other merchants as a payment service provider.

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Why choosing a white-label PSP is better than building your own?

There are several reasons why white-label payment processing is much more efficient than developing your own solution. We've compiled a brief table listing the key differences:

Now, let's look at the pros and cons of a white-label payment solution for payment providers in more detail.

Pros of using white-label PSP compared to starting from scratch

1. It's faster. You'll need no less than two years to hire a team, develop your own software, obtain necessary licenses and pass security and compliance audits, establish connections and integrations with third parties, and get your first client on board. Choosing white-label PSP makes you all set in a month or even less.
2. It's cheaper. Development accounts for the most significant share of the costs you'll have to bear, but there's much more to pay for: equipment, licenses, audits, etc. Moreover, odds are you'll just waste some of the money, alongside time and resources, because some things may not work, and some can go wrong. All in all, white-label PSP ends up being much cheaper and cost-efficient.
3. It requires minimal effort on your side. The provider of the white-label solution you opt for will help you get started without the development effort needed from you. They will likely offer you technical support and maintenance as you use the solution. Isn't it great to have everything taken care of by professionals?
4. It's safe and feature-rich out-of-the-box. As we've mentioned, there are a variety of white labels on the market. Competition drives innovation, so payment service providers equip their offerings with a range of supporting features and enhanced capabilities. It's up to you to choose what best meets your needs.
5. It allows you to focus on building relationships with your clients. White-label PSP deprives you of the burden of technical hassle, so you don't have to worry about it. You can fully dedicate your time and efforts to building relationships with your merchants and expanding your client base.

Cons of using white-label payment service provider

We should have listed the drawbacks of a white-label payment service provider compared to a custom-made one, but there's a little to explore. First of all, it's a possible lack of customisation and tweaking. Moreover, it makes you technically dependable on the solution provider. That's why you should focus on security and trustworthiness, as with everything regarding payments.

Take your time and do some research to find a payment gateway service provider that will become your reliable partner. In this case, you may never experience the abovementioned cons. For instance, we offer lifetime maintenance and support for clients using our product and work closely with them to add additional features or integrations they need.

Conclusion

Embarking on a journey with a white-label PSP opens a world of possibilities for entrepreneurs in the payment service domain. By understanding the nuances of white-label solutions and selecting a reliable provider, you can leverage the booming PSP market to your advantage, ensuring a smooth path to success in the online payment ecosystem.