Is an ISV a payment provider?

Not necessarily. An ISV builds business software and can embed payments by referring merchants to a provider, partnering with a PayFac, or registering as a PayFac itself. Only in the last case does it carry scheme obligations and merchant risk.

Three ways ISVs add payments

• Referral: the ISV integrates a provider and sends its customers to sign up directly. It may earn a referral fee but has little control.
• Partnership: the ISV works with a PayFac or PSP that handles licensing and risk, while the ISV keeps more control of the experience and shares revenue.
• Becoming a PayFac: the ISV registers through a sponsor, onboards its customers as sub-merchants and takes on risk and compliance.

Why ISVs embed payments

Payments become part of the software, customers get one vendor, and the ISV earns revenue on transaction volume rather than only on subscriptions.

What changes as the ISV takes on more

More revenue and control, but also more obligations: onboarding checks, monitoring, dispute handling, payouts and scheme compliance.

A step-by-step path

Many ISVs start with a partnership and move toward a PayFac model as volume grows.

What it means for payment operators

For ISVs, a white-label payment platform makes each step easier: payments under the ISV's brand, onboarding and merchant management included, and the option to move toward a PayFac model without rebuilding.