Embedded lending as a growth strategy for ISVs – how to maximize revenue potential

Steven Velasquez, Head and Senior Vice President of Partner Business Development – U.S. Bank | Elavon

As consumer expectations for seamless buying experiences continue to rise, independent software vendors (ISVs) that embed payments into their platforms position themselves to capture greater market share in a growing and increasingly competitive software landscape. Consider this: the global ISV market clocks in at USD 2.35 billion in 2025, growing to USD 5.5 billion by 2030, reflecting a compound annual growth rate (CAGR) of 18.5 percent. 

With such rapid growth ahead, distinguishing your business requires more than a presence in the market—it demands forward-thinking innovation. So, how do you differentiate your business and capture a greater share of the market?

A strategic approach is essential to building scalable, adaptable solutions that support long-term growth in a rapidly evolving industry. ISVs that understand this are more successful in a crowded marketplace. How you implement these services, however, is what truly sets you apart. Your financial services framework should extend beyond payments to deliver a comprehensive, value-driven experience.

Implementing lending functionality through API integration is part of a broader approach to delivering greater value to your customers. Capitalizing on this trend now can give your business a competitive edge in a market poised for exponential growth. Analysts estimate the embedded lending market will reach USD 7.66 billion in 2025 and grow to USD 28.43 billion by 2032, with a CAGR of 20.6% from 2025 to 2032.

Let’s look at how embedding lending functionality into your software can maximize your revenue potential while scaling your business. To understand the tangible benefits of this approach, it's important to explore how embedded lending can directly contribute to your bottom line. Primarily, ISVs can monetize embedded lending by earning referral fees or revenue shares. This creates a valuable new income stream without requiring significant investment or operational overhead.

Not only does it open up new revenue streams, but your software solution enables users to access financing options without leaving the software environment. This creates a smooth and intuitive experience that enhances customer satisfaction and loyalty. The advantages extend beyond lending alone—by enabling ISVs to offer flexible financing solutions, you empower your clients to boost customer purchasing power, which drives higher conversion rates, lowers cart abandonment, and increases average order values.

Let’s explore a specific use case: a home services-focused ISV that offers scheduling software with integrated payments and embedded lending tailored for plumbing companies. By incorporating point-of-sale financing directly into the platform, the ISV empowers plumbing businesses to offer immediate lending options for emergency or high-cost jobs.

For example, when a customer needs a new HVAC unit, ABC Plumbing can present a financing solution at checkout, making the expense more manageable. Once approved, the financing provider pays the plumbing company in full right away, ensuring the job can proceed without delay.

This model creates value for all parties involved. The consumer benefits from flexible payment options that ease the burden of unexpected expenses. The plumbing company receives prompt payment, improving cash flow and enabling timely service delivery. Most importantly, the ISV deepens its role as a strategic operational partner, reinforcing its value to the service provider while also generating revenue through a share of the lending activity.

As embedded finance continues to reshape the software industry, integrating lending functionality offers ISVs a strategic edge. ISVs can deliver more value to their users, differentiate themselves in the market, and grow their businesses in new and sustainable ways. We can help.

U.S. Bank | Elavon – Putting it all together

It’s paramount to find the right payments partner that can develop the framework for your success. Backed by the strength and stability of U.S. Bank, Elavon can empower you to optimize your payments and financial services strategy to accelerate your speed to market, maximize your revenue, and scale your business for future growth. Discover what’s possible with our award-winning APIs , comprehensive integrated software solutions ecosystem, and Avvance™, our point-of-sale lending solution.

Whether you’re new to the industry or a seasoned ISV, we’ll help you build your long-term strategy. Decades of experience working with partners has driven us to develop an exceptional implementation, training, and incubation experience that enables you to achieve your maximum potential as a partner with us. It's why more than 1,000 integrated partners, 1,700 financial institutions and 350 ISOs/MSPs trust us to grow their business. Find out what’s possible. Call us at: 800.725.1243.

[1] Mordor Intelligence
[1] Coherent Market Insights
[1] 2023 API World Awards – “Best in Payments APIs”