Main Label vs. White Label: What Makes A Choice the Right Choice?

For those who want to step into the brokerage business, or any start-up broker, there must be a lot of questions and confusions on how to build up a trading platform as well as platform maintenance & operation and customer service. Among all the choices, it is quite common for brokers to debate on whether they should go with main label or white label. So, what are the differences in terms of costs and operations? Starting from white label solutions, this article hopes to provide certain level of reference for start-up brokers, hopefully help them make a truly wise choice at the end of the day.

White Label? Main Label?

To put it simply, a main label has to apply for full authorization of MT4/MT5 from MetaQuotes; while in a white label's case, a main label leases out its MT4/MT5 platform to a leasee, i.e. the white label, which then operates its business on the platform with its own brand. In other words, the trading software of a white label is a lease from a white label provider, a main label. But the white label is allowed to rebrand it with its own brand and logo, which is sort of similar to the OEM mode.

The majority of mainstream platforms in the market, such as Gains Capital, Tickmill, and Just2Trade, they all purchased main label from MetaQuotes.

To push its MT5, MetaQuotes stopped selling MT4 main label since late April 2017. As a result, you could only obtain it from someone else in the market. The MT5 main label, on the other hand, is still available.

No Choice is Wrong, Only Wrong Positioning

So, which way is better for a start-up? Well, let's nail down one thing first, and that is how you position your company.

For a start-up that has abundant capital, a relatively huge clientele, and aims to become a mainstream broker in the long run, the best choice would be purchasing directly from MetaQuotes. When you have full authorization over MT4/MT5, you can build a more flexible platform, and even carry out white label solutions for others.

In addition to full authorization over the entire software, you may also add risk plug-ins and settlement function. A main label is in possession of independent servers and have its own liquidity providers, without restrictions in any respect.

For the majority of start-ups, however, main label still remains a luxury, since it is highly costly to buy and maintain. It costed 1,500 USD monthly for service and 75,000 USD to purchase the label of MT4 before January 2017. The monthly service costed 2,000 USD and it took as high as 100,000 USD to purchase the label after January 2017, and now it is unavailable. In addition to the purchase cost, the money you're likely going to spend is going up even higher because of the expenses of network infrastructure, liquidity connectivity, bridging and risk plug-in etc.

The white label solution is undoubtedly more cost-effective compared with the main label solution. In addition to lower cost, white labeled brokers are also spared from server deployment and management, all of which are left for tech providers to take care of. A number of white label providers are offering turnkey service, which comes with a whole package from building your website, connecting to a liquidity pool, bridging to risk management. You could have your own white labeled platform within 2 weeks at the earliest, provided you have taken care of your licensing beforehand.

The 'Company' List at Fazzaco

At present, there are 64 firms fall under the “White Label” category of the Company List at Fazzaco.com. Click on a company name and enter its home page, where you may see the number of followers and reviews, as well as the current rating of the company at Fazzaco. Besides, there are also comments left by users here. You’ll notice four sub-segments on the left, which are "Posts", "Products", and "Reviews" in addition to "Homepage".

Take the homepage of B2Broker as an example, B2Broker is a liquidity and technology provider of solutions for the crypto and forex industry, and has claimed the page at Fazzaco. Click on its Products, and you would find the "White Label" solution which offers you with detailed information you need to know before you make your choice.

Earlier, Fazzaco has published a commentary article, comparing the pros and cons of white label solutions​ provided by fintech firms (as in B2Broker in this case) and broker firms (as in GAIN Capital in this case).

Conclusion

The question of whether a start-up broker should choose white label or main label cannot be answered simply. Any platform has to obtain sufficient information, and make the right choice based on its own demand and positioning.

As a pioneering forex B2B website, Fazzaco covers all categories across the markets, including white label providers. Sign up at Fazzaco to unlock more information and contacts of different firms, and help you find the right partner.