The payment facilitator model as a growth strategy for ISVs

By Jimmy Lewis, Vice President, Payment Facilitation

The rise of Software as a Service (SaaS), AI technologies, financial services APIs, and embedded finance has reshaped the payments ecosystem, creating value beyond simple transactions. These shifts mean traditional payment models now compete directly with independent software vendors (ISVs) and payment facilitators (PayFacs). In fact, 87% of U.S. merchants choose their payment provider at the same time as their business software.*

Notably, the rise of embedded finance and proliferation of SaaS solutions has accelerated the growth of the PayFac model. Case in point: according to Growth Market Reports,* the global payment facilitation market size will reach $50.1 billion by 2033. This growth highlights why it’s critical for ISVs to understand the benefits of transitioning to the PayFac model.

Delivering a better merchant experience

Now more than ever, merchants face a wide range of options when choosing a payments partner. The merchant experience - and, by extension, their customers’ experience – drives the success of any payments partnership. PayFacs deliver significant advantages by simplifying onboarding/underwriting, streamlining risk management, and ensuring compliance with industry regulations, a time-consuming and arduous process for merchants.

However, the merchant experience extends well past the onboarding stage. PayFacs add value throughout the entire customer lifecycle. ISVs that adopt this model typically scale their businesses and sales channels to deliver value-added services that strengthen relationships with merchants and end customers – and go beyond payments. By adopting the PayFac model, ISVs can deliver a more holistic solution, incorporating embedded finance features such as advanced customer data analytics via dashboard reporting and flexible financing options for customers.

Optimizing revenue potential for you and your merchants

Beyond operational savings and enhanced customer stickiness, the PayFac model also empowers ISVs to unlock new strategic growth opportunities by integrating payments more deeply into their product ecosystems. As ISVs gain visibility into transaction-level data, they can surface richer business insights, personalize customer experiences, and introduce data-driven features that further differentiate their platform. This embedded data intelligence can lead to tailored pricing strategies and new service tiers that boost overall revenue.

Further, ISVs who adopt the PayFac model can benefit from significant costs savings – taking on individual merchant account setups and the underwriting process. This approach also strengthens customer relationships and reduces churn. The value goes beyond payments – embedded finance becomes a true competitive differentiator. For example, many PayFacs offer funding solutions that eliminate the need for costly money transmitter licenses. Fast funding is now table stakes. But funding that actually reduces costs for customers? That’s a significant value add.

Choosing the right partner program for your business

In today’s payment landscape, selecting the right payments partner and model is paramount to creating the blueprint for your success. So, how do you evolve to meet this changing demand and position your business for sustainable growth?

Backed by the strength and stability of U.S. Bank, we can help you scale your business with our comprehensive payment facilitator program. Elavon solutions serve as a connecting force – integrating your entire payments system, so you can focus on what matters most: moving your business forward. It's why more than 1,000 integrated partners, 1,700 financial institutions, 350+ ISOs/MSPs, and payment facilitators trust us to grow their business.

Ready to get started? Give us a call: 844.904.0429

Call 844.904.0429

* By selecting this link, you will leave Elavon content and enter a third-party website. Elavon is not responsible for the content of, or products and services provided by this third party, nor does it guarantee the system availability or accuracy of information contained in the site. This website is not controlled by Elavon. Please note that the third-party website may have privacy and information security policies that differ from those of Elavon.