For independent software vendors (ISVs), payments are now much more than an API call or a line item on a roadmap. They’re a core driver of revenue growth, retention, and market expansion. As demand for embedded finance grows, ISVs increasingly face a decision: settle for commoditized, one-size-fits-all payment platforms, or align with a partner that builds strategy, scalability, and flexibility into every integration.
Generic providers have achieved reach through simplicity, but simplicity often comes at a cost: rigid monetization models, limited industry depth, and transactional relationships that leave ISVs to figure out growth alone. The most successful ISVs are recognizing that they’ve outgrown this approach. What they need is not just a payment processor, but a true payments partner. In this article, we break down the key points of friction that signal the need for change and optimization to ISVs.
Partnership-driven payments versus self-service platforms
Many ISVs discover that their payment service provider acts more like a vendor than a partner. The model is largely self-serve, e.g. standardized dashboards, online documentation, and reactive support. For smaller ISVs, this can feel like being treated as just another account.
Contrast this with a partnership model where experts embed payments directly into an ISV’s growth journey. Instead of ticketing systems managed by bots, there’s dedicated account management, co-development opportunities, and proactive guidance on monetization. This difference is critical when payments are integral to customer experience. A true partner delivers an API, but also aligns strategically with the ISV’s business model, ensuring payments become a revenue accelerator rather than a cost center.
Flexible monetization models for ISVs
Flat, transaction-based pricing may appear straightforward and easy to manage, but it rarely reflects the nuances of ISV growth goals. For example, SaaS providers may benefit from hybrid or usage-based structures, while marketplaces often require sophisticated revenue-share models to align incentives across vendors.
Providers that lack pricing flexibility force ISVs into standardized splits, often leaving margins on the table. Flexible monetization allows ISVs to test new models, adapt to vertical dynamics, and even introduce embedded financial products that generate seven-figure recurring revenue streams over time. Learn how leading ISVs are turning payments into profit centers.
In short, rigid pricing limits ISVs to today’s revenue, while flexible monetization focuses on unlocking tomorrow’s growth.
Vertical-specific payment solutions: one size fits none
Horizontal platforms are built for scale, but not necessarily for depth. For ISVs in healthcare, education, property management, or government, that can mean missing functionality or workarounds to bridge compliance gaps. Checks, escrow, split payouts, or sector-specific compliance are often deprioritized by standardized providers.
A partner with vertical depth flips the equation. Whether it’s Check 21 processing for healthcare, escrow functionality for property management, or modular payout flows for government and utilities, industry-specific capabilities allow ISVs to launch in complex markets without compromise. This not only accelerates time-to-market but also opens opportunities competitors simply can’t serve.
Reducing friction with seamless onboarding and compliance
One of the most overlooked friction points for ISVs is merchant onboarding. Rigid, manual KYC and KYB flows lead to high abandonment. Industry research proves this - business onboarding drop-off rates were averaging 30% in 2024 alone*.
Generic providers often require merchants to conform to their processes, creating mismatches with an ISV’s user experience. The result? Slower activations, frustrated end-users, and lost revenue.
By contrast, customizable onboarding, which includes instant merchant approvals, tailored compliance flows, and embedded KYB within the ISV’s own UX, reduces drop-off, accelerates activation, and ensures compliance without compromising customer experience.
Driving growth through co-selling and co-marketing support
For many ISVs, acquiring merchants is as challenging as integrating payments. Most providers typically offer limited marketing or sales support, unless the ISV is a top-tier partner.
A growth-driven PSP, however, invests in joint go-to-market initiatives, such as co-branded campaigns, referral programs, and co-selling opportunities that directly drive merchant acquisition. When the provider’s growth is tied to the ISV’s success, incentives align, and payments become a distribution channel rather than a line of cost.
Global payments scale with local acquiring and alternative payment methods (APMs)
Most large providers promote global reach, but reach is not the same as performance. Generic networks often struggle with approval rates in regulated or high-risk verticals, or rely on a single acquiring setup that limits optimization.
ISVs expanding into LATAM, APAC, or high-growth digital goods markets need more than coverage maps. They need local acquiring for higher authorization rates, 150+ currencies, 700+ alternative payment methods, and real-time smart routing that directs each transaction to the optimal acquirer. This is what ensures cross-border growth without sacrificing conversion.
Ensuring reliability with real-time support and near-perfect uptime
In payments, downtime is revenue lost. Self-serve models may provide knowledge bases or automated support, but when a mission-critical flow breaks, ISVs can’t wait for generic tickets. They need 24/7 access to experts who know their platform inside out.
ISVs that partner with providers offering near-perfect uptime (99.999%), real-time insights, and round-the-clock human support gain confidence that their payments stack is resilient enough to support large-scale events, seasonal peaks, or international rollouts. Revolv3, for example, saw approval rates rise by 14% after streamlining global payment flows with Nuvei.
Managed PayFac models: simplifying ISV operations and monetization
Many ISVs aspire to monetize payments by becoming Payment Facilitators (PayFacs), but underestimate the operational burden, such as compliance, risk management, reconciliations, funding, and merchant support. Generic platforms often offer only partial solutions, leaving ISVs to manage complex daily operations.
A “managed PayFac” model automates underwriting, KYC, funding, and disbursements. For ISVs, this means faster scaling with reduced operational overhead and the ability to monetize payments without building a compliance department from scratch.
Payments data, fraud prevention, and future-proofing revenue
Finally, payment performance is not static. Fraud patterns evolve, consumer preferences shift, and regulatory frameworks tighten. ISVs need real-time analytics, AI-driven fraud prevention, and tokenization strategies that reduce fraud while boosting approvals.
Most providers often provide dashboards and logs; strategic partners deliver insights and recommendations. The difference is not just visibility, it’s the level of actionability. When 11% of ecommerce transactions globally fail and false declines cost businesses $308 billion annually, optimization becomes a real revenue growth strategy.
Conclusion: choosing the right payment partner for ISVs
For ISVs, the question is not “who processes my payments?” but “who helps me grow?”
Many PSPs excel at scale and simplicity, but simplicity has limits. As ISVs evolve, they need flexibility in monetization, vertical depth, strategic growth support, and the confidence that payments won’t just work, but will work for their business growth.
Nuvei delivers this by combining modular technology with a partnership-driven approach, local and global scale, and industry-specific expertise. For ISVs ready to outgrow transactional providers, the decision is clear when payments are seen as no longer a utility, but rather a strategic pillar of YoY growth.
Ready to move beyond transactional providers? Connect with Nuvei experts to explore how a true payment partnership can accelerate your ISV’s growth.
*Source: https://recaseai.com/blog/improving-drop-off-rates-in-business-onboarding-for-fintechs
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