You have built the opportunity list. You have made the calls. You may have walked a trade show floor and come home with a stack of business cards from software founders. You get the meetings, but then they stall.
For independent sales organizations (ISOs), software companies can be one of the most valuable routes to growth. Win the right software relationship and you are not just signing one merchant. You can become part of the platform that serves hundreds or thousands of businesses, creating a more scalable source of payment volume and a much stickier relationship.
When it comes to those leads stalling, often the problem is not the prospect. It is the pitch. Software companies are not looking for another merchant services provider. They are deciding whether payments deserve a place in their product, what value they could create for their customers and their business, and whether that value is worth the engineering, compliance and support effort involved.
I spend a lot of time talking to software companies and sitting in on these conversations. The ones that go well rarely start with rates, terminals or funding. They start with understanding the software company: how its business works, who their clients are and where they’re looking to grow their solution offerings.
Finding the right software companies to target is where many ISOs get stuck. In a recent partner webinar poll, 75% of partners said they were struggling with exactly that. But finding the right prospect is only half the challenge. What happens once you get the meeting matters just as much.
Your prospects’ competitors have already moved. Research from PYMNTS Intelligence found that 83% of business software platforms already offer embedded payment capabilities and 54% report a direct revenue increase from embedded finance. For software companies, payments are increasingly part of the product and business model. If you want to win their business, you need to sell accordingly.
Here are the five mistakes I see most often, and how you can adjust your approach to turn their problems into a mutual opportunity.
1. You Are Running the Merchant Playbook, Not the Partner Playbook
Rates. Terminals. Basis points. Next-day funding. Those things may matter when you are selling payment acceptance to a merchant. But a software company is making a very different decision.
For them, payments are not simply a service they buy. They are something they get to build into their product. That means payments are competing for engineering time, product roadmap space and investment.
So, lead with what payments can do for their platform. Can a client’s customers complete a payment without leaving the software solution? Can the software company keep its own brand front and center? Can payments create a new revenue stream alongside subscription or software fees? Can a better payment experience make the overall product more valuable to customers?
That is the conversation I want to hear on a first call. If you start with basis points and hardware, you risk talking about your business instead of theirs.
There is a bigger business case too. As software companies grow, raise capital or consider an exit, payment revenue can become an increasingly important part of the story they tell about their business. It creates an additional revenue stream linked to activity on the platform, not just subscription growth. And the opportunity is expanding: Juniper Research expects embedded payment transaction value to exceed $2.5 trillion globally by 2028, up 134% from 2024. For software companies looking to grow their category, strengthen their economics or increase the value of the business, payments can play a meaningful role.
2. You Are Speaking Payments, They Are Speaking Software
One of the quickest ways to create disconnect with a software company is to use payments language instead of the language your prospect uses.
If they call the businesses using their platform “customers,” do not insist on calling them merchants. A healthcare platform serves hospitals and clinics, and those clients have patients. A parking platform serves operators. A restaurant platform may talk about locations or franchisees. Use their terminology in your approach.
I listen for this early in a conversation because it tells me a lot. If you are still talking about “merchants” while everyone else in the room is talking about practices, operators or locations, you are making the prospect translate your world into theirs. You should be doing that work for them.
“Partner” deserves its own warning. To an ISO, a partner can mean a commercial or sales relationship. To a software company, it may mean a technology provider that is embedded in its product and expected to perform when something goes wrong.
So when a software company asks what kind of partner you will be, the answer can be bigger than commercials, including technology, implementation, support and reliability.
3. You Are Talking When You Should Be Listening
Early on in my career, I made a habit of listening to old sales calls whenever I joined a new company. One thing came up time and again: the salesperson spent way too much time talking. On some calls, the sales rep was doing 80% of the talking. That time is better spent focusing on understanding the software company, its business and what it actually needs.
When a salesperson focuses on speaking, that costs you twice. You leave the call without knowing whether the opportunity is real, and you risk winning a signature from a platform your team cannot functionally serve well. Both sides stand to lose months of time and energy, which can also generate a negative impression of your company.
I would much rather come out of a first call with a clear picture of the prospect than with every slide in the deck presented. By the end of it, you should understand three things:
- How their business model works, including where revenue comes from today
- What their operational pain is right now, described in their words rather than yours
- Where they are taking the platform over the next one to two years
Then, once you understand the opportunity, start uncovering the technical realities. Is the platform cloud-based, on-premise or hybrid? Is there an application programming interface (API) layer already built? How much engineering bandwidth do they actually have?
And the question that will save you weeks: are they locked into an existing processor contract or exclusivity agreement? I always want to know that early. There is no point spending weeks scoping an integration only to discover there is a contractual reason it cannot move forward.
4. You Are Selling to One Person When Five People Need to Say Yes
A 10-person startup and a 500-customer platform are two different sales. The bigger and more established the software company, the more people are likely to influence the decision.
At a startup, you are talking to a founder who is doing every job in the company, who needs speed and likely needs a payments expert to help educate their team on flow of funds. In addition, you are competing for attention with the product roadmap. At a scale-up, the product and sales teams have already kicked the tires and are looking for ways to grow and build a stickier customer base, which means more functionality, broader use cases and new features to enable. At an enterprise company, you are in front of procurement, legal and payments specialists who have already met your competitors and are looking into why your solution is the better fit.
The sales conversation rarely dies with the person who took your meeting. It dies quietly, in another room where your voice is not present. Operations worries about support burden and who owns an escalation. Finance wants to understand the business case, costs and potential return. Legal wants to know exactly where the Payment Card Industry (PCI) scope lands. Product wants to know whether payments deserve space on the roadmap. Engineering wants to know how much work the integration will really involve.
It’s crucial to ask early: “Who else needs to be comfortable with this before it can move forward?” It is an easy way to uncover the real buying group before you get too far down the road.
So, map the room early. Find your executive sponsor, understand who will influence the decision and make sure you understand what matters to each of them.
5. You Are Overselling the Integration to People Who Write Code
Telling an engineering lead the integration is easy is the fastest way to lose credibility in the room. Developers test claims. They will read your API documentation faster than you can describe it, and they are often the ones who stop a deal after leadership has already said yes.
So give them evidence, not adjectives. Put the sandbox, API documentation and developer resources in their hands early and let them assess the integration for themselves.
On virtually every call I am on, I tell the software company the same thing: go and look at our sandbox. Don’t take our word for it. Get your developers into the documentation, test it and make sure it can do what you need it to do.
When a question lands outside your own technical depth, say so. I would always rather hear someone say “I don’t know, but I’ll get you the right answer” than watch them guess their way through a technical question. Engineers spot that very quickly, and you don’t want to erode the trust you’re working to build with them.
Show Up as a Partner, Not a Pitch
All five mistakes come back to the same problem: starting with payments before you understand the software business you are trying to serve.
Software companies rarely avoid payments because they don’t see the value. They worry about the technical workload, compliance requirements, operational unknowns and the support burden that can come with adding payments to their product.
That is where you can add real value as a partner. With the right payments infrastructure behind you, you can give software companies flexible no-code, low-code and full API integration options, a white-label experience that keeps their brand front and center, tools that help reduce PCI complexity and a clear support and escalation path when something goes wrong.
In my experience, two questions come up in almost every software conversation: how quickly can we integrate, and whose brand will the customer see? Answer those two well and you have addressed the biggest concerns most software companies have about embedding payments.
The goal is not to turn every ISO salesperson into a solutions engineer. It is to help you ask better questions, recognize what matters to a software company and know when to bring the right technical expertise into the room.
That’s where NMI comes in, giving you the technology and support to have those conversations with confidence while keeping the relationship with the software company yours.
Before your next software sales conversation, download our full playbook, Cracking the ISV Code: What ISOs Need to Know. It covers how to identify, qualify, pitch and close software companies on embedded payments.
Working an active software opportunity now? Talk to our team and we will help you work through the technical and commercial requirements before your next conversation. If you are already an NMI partner, your account manager is the fastest route in.
