Why does a traditional retailer need a white label payment gateway solution? Traditional trade has been experiencing increasing pressure from electronic trade competition for years. Simplicity and convenience of online shopping causes the fact that more and more goods which were previously purchased by an average buyer during an obligatory daily trip to a supermarket, are now bought via the Internet.
Traditional retailers, who have for decades felt secure and confident, now feel threatened by a new generation of Internet traders and certainly do not want to passively watch the latter bite off more and more from their pie.
Traditional retailers struggle to create online analogues of their brick-and-mortar stores. This, in turn, requires solving a number of organizational issues, one of which is accepting payments from customers via the Internet.
In essence, the payment acceptance process for an online store has been debugged over the years of the existence of e-commerce. The traditional approach to accepting Internet payments involves signing an acquiring services contract with an acquiring bank, since any Internet merchant seeks first of all to accept bank payment cards in their online store.
However, besides the acquiring bank, there is another participant involved in accepting payments via the Internet for the online store: a processing company provides the Internet store with a simple, convenient connection to the acquiring bank, a secure customized payment page where the buyers enter their payment information and a single connection to alternative payment systems. The latter is also important, because despite the dominance of VISA and MasterCard bank payment cards, there is one or several alternative local payment systems in each country or region, for example electronic purses or bank transfers available as payment instruments in the global e-commerce market. Usually such local payment systems are too popular among local buyers to ignore.
With this traditional approach to accepting Internet payments, the cost of accepting one payment for an online store is on average 3% of its amount. Of which approximately 1% goes to the processing company, and the rest goes to the acquiring bank or to the operator of the alternative payment system whose payment means the online store accepts. These figures can vary depending on the region, the scale and popularity of the retailer and other factors. But one rule always remains unshakable: if a processing company is involved in the process of accepting payments via the Internet, the fee for processing services is part of the retailer’s expenses for accepting online payments.
These costs seem inevitable. At the same time, for a medium or a large retailer with annual online sales reaching dozens and hundreds of millions of euros, the cost of accepting Internet payments can easily amount to hundreds of thousands and even millions of euros per year. Well, much smaller amounts encourage businesses to look for ways to reduce costs.
Not a standard approach: white label payment gateway solution
How about organizing payment acceptance not in a standard way: declining services of the processing company, but at the same time accepting payments through the Internet just as conveniently and easily?
The processing company makes it easier for an online store to accept payments via the Internet. It does so by using sophisticated software known as the “Internet payment processing system” or “white label payment gateway solution”. Any online store is connected to such a system. This system manages the flow of transactions, checks transactions for fraud, sends them to the appropriate acquiring banks or alternative payment systems, and makes many more operations thanks to which the online store gets fast, safe and convenient money acceptance from the Internet buyers. The system tracks everything itself.
To eliminate the intermediary between the retailer and the acquiring bank, the retailer needs their own processing system to accept payments in the online store. Something like an in-house processing company that provides exclusive services to the retailer’s projects.
Of course, for most small Internet merchants with sales below several dozen or hundred thousand euros per month, this idea will not seem attractive enough. However, if the online retailer expects a monthly turnover of 1 million and above, using their own processing system to accept Internet payments can potentially save thousands upon thousands euros per year.
For a retailer, getting and using their own platform for accepting payments over the Internet is much easier than it might seem at first glance. You can rent all the necessary software and equipment for it.
For example, the platform beGateway for online payment acceptance and processing developed by the company eComCharge is a cloud service for business, which enables any company to obtain their own system for processing and accepting bank payment cards and alternative means of payment via the Internet. It can be done both easily and quickly.
For a retailer, using their own processing system based on the beGateway platform instead of the services of a third-party processing company, means getting all the advantages and opportunities that the most advanced processing company can give, but for much less money. The fee to rent the processing system depends on the number of payments processed, and not on their amount, so the benefits are obvious.
Using one’s own leased processing system does not require changes in the retailer’s technical staff and does not mean more work for them. The solution provider takes care of:
• initial setting of the online payment acceptance system,
• connection of the system to the retailer’s acquiring banks and alternative payment systems,
• configuring security and fraud control systems, etc.,
• subsequent monitoring and maintenance.
The retailer is free from having to solve any technical issues related to accepting Internet payments in their online store, which allows to pay more attention to the development of their trading business.
Having one’s own processing system can be especially convenient for a retailer that opens or has already opened online stores in various countries. As a rule, the retailer’s subsidiaries work with local banks in each country. And each bank provides acquiring services for the retailer’s network in a particular country. Using one’s own processing system for processing payments via the Internet will create a single centralized transaction processing center for the retailer’s all online stores in all countries. The processing center will be able to distribute transactions between the respective acquiring banks and payment systems and instantly provide summary information about processed Internet payments, both for all stores together and for each individual store separately.