Key considerations when choosing a new payment platform

Sunil Jhamb, WLPayments: When it comes to white-label platforms, being technically relevant and anticipating market trends is of the utmost importance

In the fintech markets of today, open and modular banking is a continuing trend. At the same time, it is a highly specialized and complicated ecosystem for outsiders to figure out. The growing demand for white-label solutions triggers various companies to offer their solution as a white-label product. The same goes for payment platforms.  

As different companies face various challenges and priorities when it comes to deciding on a new payment technology platform, we share the following three questions to consider.

First, buy or make?

The “not invented here” syndrome is still a dominant force in traditional companies, ‘It can't be any good if we didn’t make it ourselves’. Of course, this is also the reason many companies are not able to keep up with the fast-paced changes in the digital world of today. If you are not capable of developing in an agile, flexible way, with quick releases and extensive client testing, your solution will be outdated before it even hits the market.

Looking at the skills, knowledge and development power necessary for building a platform from scratch is an expensive option. If not prepared well, it leads to a grave risk of abandoned and otherwise unsuccessful projects.  We have seen failures in revamping payment processing by banks - some of these have hit the news, but usually these are not being made public. Looking at the broad scope of activities, banks need to make choices on what they want to develop on their own or what they want to insource through white-label or buying a company altogether.

The companies operating within the payment sector have a tougher choice to make. After all, payments is their core competence. Whether you are an acquirer, PSP or gateway. Investing in your own payment software should make more sense since you don’t want to depend on someone else when it comes to payments. But, you also need to be aware that, depending on the architectural demands and the features your staff and clients need, building a platform could take years. Within that period of time, you run the risk of losing key members like senior developers who are hard to come by in the tight labour market. Also, you need to be able to change course during the project due to new regulations, change in market demand or competition.

In many cases, licensing a white-label platform can be the better choice. Replacing your dated technology with a modern and fast platform, could mitigate opportunity risks, helps energize your salespeople and prevent clients from leaving with a competitor. White-label is not a panacea for all problems. Depending on your supplier it may offer less control over specific features or updates and it can be quite challenging to integrate into your software and reporting systems.

So, if you decide to go for the white-label solution, how do you make sure that the promises of faster launches, lower costs, and less risk is being capitalized on?

How well equipped are you and your white-label supplier to integrate the platform?

As you know it takes two to tango. And, to continue that dancing analogy, it makes it way easier to follow if the one who leads is a good dancer.

A smooth transition and migration towards a new payment platform will lead to numerous questions and issues regarding the integration. What you want to be assured of is that your white-label provider has the technical, communication and problem-solving skills that will make the integration a success. But although you might be the one following, you still need some skills in your own team and want to make sure that there is no loss of data, revenue or any security issues.

Recently, we collaborated with a company whose team had vast experience working with many other gateway providers. They highlighted the struggles acquirers and payment companies have when moving to new white-label providers. From a technical perspective, the main hurdles they faced with other gateway providers are around client migration, data portability, integration speed and integration quality. So, you want to look for a partner that is technically designed to smoothly transition and technically migrate existing payments businesses. A partner who can ensure no loss of data, security and revenue while you transition into their white-labelled solution. You want your provider to be able to fully integrate downstream with acquirers and technical service partners in significantly less time than you are used to. This will help to make the switch limit any opportunity loss and increase your return on investment. In the end, you would like your partner help you to set new and better norms. 

Additionally, once the technical and testing methodology are employed, you need to ensure that your current gateway partners receive a tested, fully complete integration that is business-ready.

A word of caution though. Do not trust a white-label that lists an acquirer, gateway provider or bank as an ‘existing integration’. These companies may use these as marketing ploys and tactics, but in many cases have only done Hosted-Payment-Page integrations, or basic server to server API integrations. They might very well do not support the full range of API integration functionality you as a client expect and need. Always make sure you have a very clear understanding of the ‘exact nature’ of the integration any white-label gateway partner you work with has, regardless of how they market it.

This could be the difference between a seamless migration and up to 6-month delay in migration and go to market.

What does the future hold?

Given the dynamic innovations in the ecommerce landscape, disruptors like neo banks and fintechs, as well as the incumbent market participants, are putting in efforts to be ready and capable in the changing ecosystem. When it comes to white-label platforms, being technically relevant and anticipating market trends is of the utmost importance.

Besides what's happening in the outside world, you also need to be aware of your own commercial and technical roadmap. And that of your white-label solution provider. See if there is an alignment or maybe a potential conflict of interest ahead.

All in all, when faced with diverse solutions out in the market, it is important to understand your own priorities and capabilities without underestimating the technical demand and challenges within the platform. It is not a platform for all and cannot be delivered by all either.

About Sunil Jhamb

About WLPayments