CEO Insights: The Struggles Of An ISV In A Payments World

Software developers with solutions that intersect with the world of payment processing know that business can be fun, exciting, and lucrative, but it comes at a cost of having to keep pace with complex ever-changing market conditions in the payments space.

Where payments are concerned, all the players involved are hoping to win a piece of the pie. Unfortunately, history shows that the way many ISOs and payment vendors won business was based on lowering costs, essentially eroding the very margins they built their businesses on. Eventually, the industry grew wise and sought to add value to maintain margins and retain merchant customers. That added value can come in many forms, but in some cases it’s by making software a piece of the solution. There have been cases of ISOs, VARs, and payment processing companies essentially morphing into software companies that also happen to offer payment processing services.

Technological advancements and a world-wide shift to smart devices has opened the door for new creative solutions on the market

At the same time, technological advancements and a world-wide shift to smart devices has opened the door for new creative solutions on the market. The end result is that established software developers in many sectors have seen a surge in the amount of competition they face, whether from new developers, ISOs, VARs, or payment companies.

Luckily, established developers who have long experienced the complexities of payment integrations can now also benefit from recent advancements. Companies like Creditcall have built easy-to-integrate SDKs that separate the payment aspects of a solution so developers can focus on improving their software rather than keeping pace with payment regulations and the groundswell of advancements happening in the payments world with digital wallets, omni-channel shopping, and more. Third-party companies like Creditcall must stay on top of all the latest payment advancements to stay in business. By allowing a partner to stay current on payments, ISVs can focus on building more value.

By saving time, ISVs can open the door to new recurring revenue streams — many ISVs have benefitted from payment residuals, but there are plenty of other add-on services that can be created to generate additional revenue.

Compared with hardware development where a mistake can be very costly, software development is an agile process, giving ISVs the freedom to explore.

There is, however, a risk with these new opportunities. Compared with hardware development where a mistake can be very costly, software development is an agile process, giving ISVs the freedom to explore. This exploration can lead to powerful enhancements and new revenue generators or to a black hole where precious development time is wasted. The challenge for ISVs today is maintaining the right amount of focus on their core competency. By off-loading payments to a third-party integration, ISVs at least have that opportunity.

Insights from Lars Pedersen, Creditcall CEO