Embedded Finance Beckons as ISVs Evolve

gigi bayneSenior Vice President of Integrated Payments nuweitold PYMNTS that the role of the independent software vendor (ISV) has evolved over the years, and more change is on the horizon.

ISVs have their roots in the 1960s, and have evolved over the coming decades to provide software solutions for specific verticals, for example enabling practice management for dental or medical practices, or front- and back-office solutions for restaurants. have become indispensable to provide.

Plus, Bayne said, ISVs have developed a loyal customer base, and the natural expansion will include payments — specifically, embedded payments.

In helping customers integrate payments into their own products and services, ISVs boost their own top-line speed (and that of their merchant customers) and make their relationships with customer firms even stronger. This integration helps accelerate revenue for both ISVs and their customers by providing a seamless payments experience that can significantly increase sales and customer retention.

As Bayne told PYMNTS, “Unified payments have helped increase operational efficiencies, reduce costs – and changed the story for merchants.”

What needs to be considered

To bring embedded payments firmly into the mix, ISVs will need to consider their own options when examining partnerships with payment providers. One of the most immediate considerations is to find a provider that offers integrated solutions that can work across a wide range of processing platforms. Optionality is also important, as ISVs and their partners must be able to support traditional card payment options, alternative payment methods, and mobile options.

“There should be solutions for all of those environments,” he said, “with simple integration points involving payment links, hosted payment pages and gateway solutions that take the merchant out of the risk realm of the payment card industry because commerce Moves toward integrated, omnichannel channels. Adjustment. Cross-channel commerce can help a merchant grow revenue by high single-digit percentage points faster as they combine mobile and digital options with in-store purchases, Bayne said.

In addition to integrations, merchants need to have a strong selection of other features like recurring billing, tokenization, automatic account updates, and currency conversion.

“All of these features should be available because each ISV represents different use cases with their individual merchants and MCC codes,” Bayne said.

Onboarding should also be seamless and quick, as ISVs often bring on board multiple merchants at any given time, which helps build their customer base. As an example, Nuvei offers its AppLink web API, which is directly connected to an auto-underwriting robot, so merchants are approved and payment-enabled within 24 hours.

“The onboarding process is the first point of contact with the processing partner, so it needs to be good,” he said.

Asked by PYMNTS how the role of ISVs will evolve and change over the next few years, Bayne said banking as a service, card issuance and buy now, pay later, as well as trade finance and lending, The developments remain largely untapped in the market.

“These embedded finance solutions benefit all types of merchants, be it SMBs, or B2B or B2C firms. And embedded finance can be a tremendous differentiator for a lot of ISVs,” he said.

If making the transition to payments and embedded finance can be considered a first step into the payments space for ISVs, then the development of “payments experts” would be the next logical step.

To future-proof their businesses, Bayne said, ISVs must “think about payments as a core component of their business and their offering.”

Payments may once have been considered a cost center to manage – but now it provides an opportunity to generate revenue.

“This is an important component for payment,” he said.