In today’s software driven market, Independent Software Vendors (ISVs) face the critical and complex decision of selecting the right payments partner. This choice goes beyond mere transaction processing; it’s about finding a seamless extension of their services that enhances user experience, operational efficiency, and a partner that supports your desired growth trajectory.

This complexity not only affects the technological infrastructure but also impacts overall business operations, customer satisfaction, and the ability to scale effectively. Making the right choice in a payments partner is essential for ISVs looking to stay competitive and meet the evolving demands of their customers.

The purpose of this blog is to navigate through the maze of available payment solutions and pinpoint what truly matters. We will explore five key considerations that software companies should prioritize when choosing a payments partner. This guide aims to equip ISVs with the knowledge to make informed decisions to benefit their long-term success.

5 Things ISVs Should Consider When Choosing A Payments Partner

1. Compatibility and Ease of Integration

The ease of integration is absolutely important, we encourage you to keep in mind as you read this article, just because it is easier doesn’t mean it’s the right solution for your business long-term or even today. This section covers the technical compatibility and integration capabilities that are essential for a smooth partnership.

API and SDK Support

Effective integration hinges on robust APIs (Application Programming Interfaces) and/or SDKs (Software Development Kits). A versatile, well-documented API allows for the smooth addition of new payment features without impacting user experience. SDKs provide customizable code that integrates easily across various platforms, reducing development time and enhancing product adaptability. Choose a payments partner with comprehensive API and SDK support to ensure solutions are tailored perfectly to your needs while maintaining consistent service quality.

Compatibility with Existing Systems

Choosing a payments partner whose systems mesh with your current technological setup is essential to prevent operational disruptions. This compatibility should extend beyond technical specifications to include your business’s workflow processes. The right payments partner understands your business model and aligns their integration capabilities with your operational workflows, minimizing learning curves, cutting integration costs, and boosting efficiency.

2. Comprehensive Payment Options

Software companies cater to a diverse range of payment needs and consumer preferences. This section explores the variety of payment methods that ISVs should consider.

Variety of Payment Methods

Consumers today expect flexibility and convenience when it comes to payment options. ISVs should ensure their payments partner can support a broad spectrum of payment methods including traditional ones like credit and debit cards, as well as modern alternatives such as digital wallets and mobile payments. This diversity not only enhances the customer experience but also broadens the market reach, accommodating users’ varying preferences across different regions.

Offering multiple payment methods can significantly impact conversion rates. The more options available, the less likely a customer is to abandon their cart due to a lack of their preferred payment method. Ensure that your payments partner provides seamless support for all these payment methods without compromising transaction security or user experience.

3. Reliable Merchant and Partner Support 

Merchant support is first and foremost, but let’s not forget you as the partner. The best payment partners will support your merchants and provide you the guidance to grow your software company. 

Merchant Support

Effective support from a payments partner is not just about resolving issues but also about providing timely and proactive service to ensure seamless operations. Search for a partner who offers support through multiple channels such as phone, email, and live chat. The quality of customer support should be a key factor in your decision-making process. This ensures that assistance is reliable and available when you merchants need it most, preventing any potential disruptions that could affect your business and your customers.

Partner Support

Partnership support is a must, but not all partnership support is created equal. Search for payment partners that will support your payment integration journey and help you maximize your payments monetization strategy.

4. Security and Compliance 

ISVs must ensure that their payments partner not only meets, but exceeds industry security standards to protect both customer data and business integrity.

Adhering to Industry Standards

One of the primary standards to look for is PCI DSS (Payment Card Industry Data Security Standard) compliance. This standard ensures that all companies that accept, process, store, or transmit credit card information maintain a secure environment, effectively reducing payment card fraud.

Apart from PCI DSS, look for partners who are compliant with other relevant standards such as GDPR (General Data Protection Regulation) for companies operating in or dealing with the European Union, and other local regulations that may apply based on the markets you serve. Compliance with these regulations is not just about legal adherence but also about building trust with your customers by protecting their personal and financial information.

Data Security Measures

Beyond compliance, the specific security measures a payments partner employs are crucial to safeguarding data. Key security features to look for include:

Encryption: This is fundamental to protecting data at rest and in transit, ensuring that sensitive information is unreadable to unauthorized parties.

Tokenization: Replacing sensitive data elements with non-sensitive equivalents, called tokens, which can be used in the payment process without exposing actual bank details or credit card numbers.

Fraud Detection and Prevention: Advanced systems that monitor transactions for suspicious activity and are capable of intervening in real-time to prevent fraud.

Implementing these security measures provides a robust defense against data breaches and cyber threats, ensuring that both the software company and its customers are protected. By prioritizing these security aspects, ISVs can demonstrate their commitment to data protection, enhancing their reputation and trustworthiness in the market.

5. Partnership Model Requirements

In today’s embedded payment landscape, there are lots of solutions such as Payment Facilitation or PayFac as a Service that the industry is hyping up. This is a trend that’s happened in the past, but just because it is a shiny object doesn’t mean it’s the right solution for your business. 

The right partner will take their time during the initial partnership qualification phase and throughout the life of the partnership to understand current and stay ahead of evolving aspects of your business. This is especially important during the initial discovery conversations so that you can start out with a solution that is effective today but helps you scale to more beneficial partnership models as your business evolves.

To paint the picture a little more clearly, there are several models of payment partnerships, each of which require specific resources in order to effectively monetize payments within your software: 

Referral: ISVs rely entirely on the payments partner to handle the selling, boarding, and activation of merchants.

Hybrid: ISV can handle as much or as little of the payments selling, onboarding, and activation as they would like. That said, the ISV will need resources to handle these payment flows. 

PayFac as a Service: Simply put, ISVs reap most of the benefits of being a PayFac however, they are still dependent on a Payments Partner that offers an out of the box PayFac solution.

Payment Facilitator (PayFac): The ISV owns “everything payments” including the revenue that comes from it. We mean everything, including high amounts of risk and resource requirements.

At Clearent we provide partnership flexibility on a sliding scale. This means that partners can own and monetize based on their resources and capabilities while leaving the door open to take on more of the responsibility as their business grows and evolves.

Wrapping Up

Choosing the right payment partner is a strategic decision that can significantly impact the success of any ISV. It requires a thoughtful evaluation of several critical factors including integration capabilities, payment options, support systems, security standards, and the flexibility of the partnership model. Each of these elements plays a crucial role in ensuring that the partnership enhances your software’s value, supports your growth, and aligns with your operational goals.

As you consider your options, remember that the best payments partner is one that not only meets your current needs but also demonstrates the capacity to evolve with your business. At Clearent, we are committed to supporting our partners through robust APIs, diverse payment options, dedicated support, stringent security measures, and flexible partnership models. We understand that our success is directly linked to yours, and we strive to foster a collaborative relationship that champions both.

Learn more about our ISV Program

Article by Clearent by Xplor

First published: April 29 2024

Last updated: May 30 2024