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Developing apps or software from scratch can be complex, expensive, and challenging—especially for companies entering the financial market for the first time.

To access sophisticated solutions without having to spend too much, most financial institutions rely on the help of White-label Fintechs.

White-label Fintechs are companies that specifically provide financial-services technology to other companies that do not have the same technological apparatus.

This model involves a regulated entity that provides technological know-how, and a company that does not have the same technology and compliance capacity, but has great new ideas to monetize—or a strong enough brand to put that technology to good use.

The good news is that many white-label technology companies now provide development and programming services that can be used by companies from other sectors. With this technology, they can better serve their customers by offering resources such as payment methods, digital wallets, custom cards, and much more.

In this article, we will explain what white label is, how this business model works, how it applies to fintechs, and how it can benefit your company.

Keep reading to learn everything about White-label Fintechs:

• ● What is white label?
• ● What is a white-label fintech?
• ● What services are offered by a white-label fintech?
• ● When to use a white-label platform
• ● Do you need to be in the finance industry?
• ● 4 benefits of hiring a white-label fintech

First: what is white label?

White label is basically a business model in which a company that owns a technology or infrastructure provides it for use by other companies without the need for copyright ownership.

“White label” in practice refers to the possibility of applying your own brand to something that was already developed or made available by another company.

This strategy is not new. White label has been used for a long time, for example, in the fashion industry, when generic textile industries manufacture clothes to be labeled and later sold by major brands.

With this business model, hiring companies don’t need to worry about the cost of development, administration, or maintenance of the technology or infrastructure, because these issues become the responsibility of the company that offers them.

That way, companies don’t need to invent a product and then have to test and build the entire production process to benefit from it. They simply take the product “off the shelf”, label it, package it well, and can then focus on generating profits and keeping customers satisfied with new products or services.

What is a white-label fintech?

Now that we explained what white label is, let’s show how this concept applies to fintechs. Basically, a white-label fintech is a company that specifically provides financial-services technology to companies that do not have the same technological apparatus.

Therefore, instead of worrying about building a financial product from scratch, a fintech can use pre-existing resources and technologies to assemble its product with its own brand, as if it were its own creation.

This strategy allows fintechs to enter the market faster, saving time and money. In addition, by bringing the most up-to-date resources available, they can remain relevant in a highly competitive scenario.

In this way, this model is especially useful for businesses that don’t have the time, budget, or staff to start the technical part of the project from scratch.

Another important point is that a white-label fintech generally brings the benefit of having an established regulatory license, ensuring compliance with current laws.

Therefore, it establishes a partnership between a regulated supplier, which provides the compliance foundation and technological solutions, and a company that does not have the same technology, but has great new ideas on how to monetize them.

>> Build your fintech with X-Apps: talk to our specialists

What services does a white-label fintech offer?

White-label fintechs offer services such as:

Digital bank: One of the solutions offered is the possibility of creating a digital bank with a modular structure and different features to meet your customers’ needs. These resources include account opening, card issuing, various forms of payment and receiving, transfers, withdrawals, and much more.

Digital wallet: Another possibility is to offer your customers a digital wallet as a payment solution, in which you can include your company’s brand. That way, customers can perform financial transactions using electronic devices, without needing to use cash.

Payments: White-label fintechs also offer payment platforms through card payment machines. They provide the most varied payment types, such as credit, debit, corporate cards, among others.

Payment gateway: This solution enables online payments in several modalities: web, app, via link, QR Code, and subscription, serving all types of businesses.

Cards in different modalities: The white-label card is indicated for retailers and companies that want to offer a credit card with their own brand. In these cases, fintechs handle card issuing, processing, and management—fully customized according to the visual identity of the partner company.

>> VTEX for digital stores: what it is and how to use it

When to use a white-label platform

In general, a virtual business starts looking for a white-label platform when it wants to expand its product and service offers but does not have the knowledge or time required to develop them.

In addition, adopting a white-label strategy is usually much more cost-effective than hiring and maintaining an in-house team to create the service and also having to spend time with the learning curve.

Also, white-label companies provide incredibly powerful resources to introduce companies from all sectors into the digital world. In this scenario, customers demand friendly experiences, endless options, and always-on availability across multiple devices. We’ll talk more about this below.

>> Blitzscaling: learn about Amazon’s growth method

Do you need to be in the finance industry?

The answer is no. White-label financial solutions are reaching sectors far beyond fintechs.

Brands from other areas, such as the food and apparel sectors, are starting to integrate financial services combined with technological solutions into their product and service offerings.

Online stores or marketplaces, for example, can hire a white-label company to develop an online payment method for their business. This facilitates not only the user experience but also the company’s sales management.

4 benefits of hiring a white-label fintech

The benefits of white-label technology solutions have been widely recognized in the tech world for some time. In addition to reducing costs, they accelerate go-to-market and revenue generation, since the technological solutions are already ready. See below.

1) Reduced risk of errors

Acquiring a solution that has already been tried and tested has become an attractive risk-reduction strategy, allowing emerging companies with great new ideas to focus on developing new products, strengthening their brand, and expanding their customer base.

In addition, by using a white-label solution that has already been proven in the market, the partner company is protected regarding market risks and compliance rules that come with providing financial products.

2) No need for internal technical knowledge

A white-label company provides not only technical resources but also all its knowledge in topics related to development technologies, such as front-end and back-end. With this, the hiring company can focus its internal staff on other administrative and strategic tasks more connected to business goals.

3) Modern and up-to-date solutions

One advantage of adopting this business model is having access to a wide variety of technological solutions, meeting the needs of different customer profiles. All of this with the guarantee that resources are among the most up to date in the market.

Since this solution is developed by specialists, delivering good products and services is also enhanced, ensuring good performance and customer satisfaction.

4) Focus on what matters: the business model

With the technical part of your product coordinated by a white-label company, you can focus on what matters: finding a sustainable business model.

In other words, without worrying about deeper programming and development issues, you can focus on searching for an innovative product and staying close to customers.

Conclusion

As you can see, white-label solutions play an important role in the growth of fintech and retail sectors, enabling reduced costs, resources, and time to launch.

Just look at the e-commerce and banking sector today to see that white-label solutions are a highly beneficial strategy. As these industries become more open to third-party partnerships, it becomes easier to save time and resources when deploying new solutions.

However, finding the right partner for your white-label solution—one with extensive expertise and experience in software and application development—is usually a complicated task. This company must be capable of building scalable, secure, and fast applications. A good option to develop your solution may be to hire the services of a software house.

Do you need a white-label fintech for your business? X-Apps is the solution! Talk to one of our specialists here and learn how we can help.

Learn more

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>> What is a software house?