Particularly in the last several years, payment technology has seen a significant evolution. Consumers desire ease, whether they are purchasing in-person or online, as evidenced by the growing popularity of digital and contactless payments.
Businesses have already begun leveraging this trend, and a number of fintech startups have developed creative, seamless payment methods. SaaS businesses and independent software providers (ISVs) aren't lagging behind either.
By collaborating with a provider of plug-and-play payments solutions, an increasing number of ISVs are seeking to include payments in their services in order to create more practical software solutions. But selecting the best ISV payments partner can be challenging because there are so many market participants, each with its own features and capabilities.
In this post, we'll examine the elements ISVs should take into account when selecting a payment partner. We'll also go through the benefits of integrated payment systems for your company and the different partnership options you may pick from.
What Advantages Do ISV Payments Partnerships Offer?
ISV payments may benefit your organization strategically for a number of reasons, adding value for both your business and the consumers of your product. Let's examine a few of them:
Increased income production
ISV payment relationships give you the chance to expand your company's revenue sources, which is one of their main benefits. Typically, there are three ways to create this recurring revenue stream:
Agent partnerships - In this arrangement, you would oversee sales and onboarding while the merchant services provider would oversee system activation, instruction, and customer support. Referral partnerships - In this arrangement, you would only be responsible for supplying new leads; your payment processing partner would handle all sales, onboarding, and support. Partnerships with ISOs - Assuming the position of an ISO, you would be in control of all sales and support operations. This gives you more control over the user experience, but in comparison to the other two models, it also entails a larger responsibility and financial burden.A better user interface
An ISV payments collaboration also has the potential to significantly improve user experience. You can assist customers in completing their checkout in fewer stages on the same page rather than directing them to an external site, which often requires many steps. It goes without saying that this improves the customer's journey and makes payments much more frictionless.
Increased safety
It is crucial that your security procedures are top-notch when managing payments. Fortunately, an ISV payments partner can handle tokenization, which replaces sensitive data with substitutes that cannot be used for malicious purposes. Because of this, end users may relax knowing that their financial information is secure.
Enhanced productivity for your software users and merchants
ISV payments, as opposed to performing everything manually, can greatly enhance and optimize company operations for merchants. Integrated payment systems can automate record-keeping, which helps save time and resources while also ensuring that merchants receive their payments more quickly.
9 Key Characteristics to Look for in an ISV Payments Partner
After discussing the advantages of integrated payment systems, let's look at the factors you should take into account when selecting an ISV payments partner.
Accepted Payment Methods
You must consider all possible payment options for customers if you want to make payments for your software users as simple as possible. Despite the exponential growth of digital payments, traditional payment methods like credit cards are still widely used. Credit cards were used for 40% of POS transactions in 2021.
As a result, your solution must enable a variety of payment options, such as wearables, contactless payments, digital wallets, debit and credit cards, and debit and credit cards, among others. In addition to these, certain sub-merchants might provide subscription services or loyalty programs, necessitating the secure storage of payment information.
Therefore, it is crucial that your ISV payments partner is able to support a wide range of different payment methods and provides tokenization for safely storing payment information. Additionally, confirm that your ISV payments partner can offer the terminals and readers your users will require to complete these payments.
For instance, Stax Connect not only accepts a range of payment methods, such as EMV, contactless, mobile wallets, etc. but also offers the hardware required by sub-merchants to take them. Additionally, our technology supports tokenization, allowing you to handle sensitive data indirectly for both one-time and recurring payments.
Even if you simply want to offer a few payment options right now, it's smart to think forward and choose a partner who can adapt to your changing demands as your business grows. If your current partner only accepts a limited number of payment methods, you might later find yourself having to switch to another one.
Features That Your SaaS Platform and Merchants Will Need
The features and value-added services that an ISV payments partner offers must be taken into consideration while making your decision. Simple cross-border payments and fraud prevention may be among them, as well as powerful reporting, analytics, marketing, and customer engagement tools.
The features that make the most sense for your company will, of course, rely on the people you serve and the demands of their clients. However, at the very least, seek an ISV payments partner that offers a unified dashboard for sub-merchants to conveniently track user onboarding and monitor payment activities.
A payments partner like Stax that assumes the risk of receiving payments on your behalf (and the behalf of your clients) would also be a significant benefit. Consider the qualities that are absolutely necessary for your company and those that could be great to have when choosing a partner, and then act appropriately.
ISV Payments Platform/Technology
Businesses want payment solutions that go beyond the usual brick-and-mortar point of sale in the omnichannel commerce era. They demand solutions that can be accessed from many devices and connected while in motion. Find an ISV payments partner who can streamline payments by combining in-person and online payment processing on a single integrated platform.
Also take into account the APIs, SDKs, developer tools, and documentation that your payment partner might offer. In the end, you need a partner who will significantly reduce your developmental efforts and get you up and running as soon as possible.
Integration of Software
Regardless of the integration technique you choose, your payments partner must offer reliable, adaptable, and simple-to-use APIs that enable quick and smooth payment integration. To improve your offering, you as an ISV need to understand how your software might integrate with your partner's platform and what tools and support, they will give.
Consider the type of technical help that might be offered as well. Will they spend the time necessary to comprehend your technological needs? And will they walk your team through different features or how to leverage their APIs to improve the functioning of your software? These are all crucial factors that can have a big impact on your time to market and the capacity of your team to support new integrations.
Connection to a Sponsor Bank
A sponsor bank's main responsibility is to make sure that payments made by end customers reach the sub-merchant and ACH payments reach the processor. A portion of the interchange fees due to issuing banks and card issuers (like Visa or Mastercard) must also be paid by them.
All of this is to suggest that a sponsor bank is a critical component of the payment ecosystem, and establishing a working partnership with one is essential if you wish to enable payments. Unfortunately, this is frequently a difficult, expensive, and time-consuming process.
Searching for an ISV payments partner who already has a relationship with a reputable sponsor bank that you can take advantage of would therefore be well worth your time. Your time at the market will also be greatly shortened thanks to this.
When you work with Work 365, for instance, you can benefit from our long-standing partnership with one of the largest sponsor banks in the world, which will enable you to save the time and costs usually associated with becoming a PayFac.
The fee schedule/revenue split model
You normally get a cut on the money made when transactions are processed through the linked payment system. However, things can frequently get rather difficult. You must mutually agree with your payments partner on a revenue share proportion (or split), which may be based on your processing volume, your pricing strategy, or the number of merchants.
Although many payment partners claim to offer significant residual shares, they may not always be completely honest in their interactions. Find a partner that is willing to spell out all the smaller elements in your residual statement in detail. To be certain, you can even request examples of residual statements.
Underwriting Procedure/Times for Approval
Your sub-merchant onboarding procedure needs to be as quick and painless as possible to maximize customer retention and loyalty. Finding a payments partner who makes managing your merchant portfolio simple, from onboarding to risk management, is crucial. Enrollment can be simple with the correct assistance, so be sure to investigate the skills your partner provides.
For instance, Work 365’s pre-built enrollment platform may assist you in managing user onboarding, accessing detailed underwriting statistics, and monitoring your enrollment pipeline. Additionally, our managed underwriting procedure allows your users to begin processing payments within just 20 minutes of getting started, saving you the expense of employing underwriting analysts or purchasing pricey technologies. This results in more devoted clients who are more inclined to stick around and even suggest you to others.
Provider Support Services
A recent study found that ISVs value customer care above all else when selecting a payments partner. ISVs need a partner that provides strong assistance at every stage of the process, from technical help to go-to-market support and everything in between, if they are to be genuinely successful. Therefore, be sure to inquire about the support system your payment partner provides.
For instance, Stax offers user assistance at several levels based on the needs of the client in addition to supporting our partners, so your users can gain from speaking with a group of payment professionals. Check out how Stax helped Big Time, a SaaS provider of professional services, during its rapid development.
Additionally, find out if your payments partner has 24/7 support, as this can considerably improve the client experience. You need to be aware of whether you or your clients can always contact a live person for assistance.
Safety
When processing payments for your clients, security is of the utmost importance. Your ISV payment partner must assist you in ensuring PCI compliance to safeguard your users and their clients from data breaches and other security risks.
Failure to comply would put your users in danger of losing clients and revenue. Tokenization and end-to-end encryption are two examples of PCI-validated technologies that you should make sure your payments partner offers.
You shouldn't settle for just another payment provider as your partner if you're an ISV trying to facilitate payments for your users. You require a committed partner who can assist in elevating your software.
Work 365 is committed to your success and progress, and we are passionate about assisting you in creating a better, more customer-focused product. We guarantee that ISVs have access to specialized marketing strategies that genuinely maximize the value of their platform to best serve end customers through our sales and marketing enablement support.
Additionally, each partner can instantly monetize their payment volume through our proprietary revenue-share opportunity, increasing corporate value. With regard to the payment options you provide, you can establish your own price structure and model while still having access to direct interchange rates.
This helps you to maximize the revenue opportunity that comes with controlling the payment experience while adding even more value for both you and your consumers.
Work 365 is an automatic billing software and subscription billing system for Microsoft partners and software vendors to streamline billing and invoicing processes.
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