Software + embedded payments = exponential revenue growth

As agentic commerce, SaaS-based business applications, and embedded finance become a regular part of global commerce, the impact of truly interconnected payments is upending the traditional consumer experience. And merchants are taking note. In 2025, roughly 90% of U.S. merchants reported using an ISV solution* for payments or business management. The facts are clear: small businesses want solutions that provide capabilities beyond just accepting payments and help them streamline their business operations.

The demand for comprehensive software solutions is exploding. In fact, the global ISV market* clocks in at $4.12 billion in 2026 with projected growth to $9.44 billion by 2035, representing a CAGR of 9.64%. But as with any large business opportunity, many players are flooding the market and creating a crowded marketplace to compete for B2B clients.

How do you ensure your software business is positioned for success? The answer lies in the added value you bring to payments experiences and your long-term payments strategy. Let’s take a closer look at how embedded finance capabilities can differentiate your business, create “stickier” long-term customer relationships and maximize your revenue potential.

Embedded payments + financial services

In the early days of the ISV market, software companies offered basic payments acceptance functionality without additional services or solutions that complement customer buying experience. These days, market saturation has driven the need for differentiated solutions that are more robust and can help ISVs attain long-term growth over time. Leaders in this space embed advanced financial and administrative tools* into their core software platforms, including automation of accounts payable and receivable, SMB lending, invoice and tax management, payroll, corporate card, and C-suite reporting.

Developing a high‑quality software solution that addresses specific vertical and segment challenges is fundamental. However, reaching a wider audience, scaling your operations, and optimizing revenue potential often requires partnering with technology providers that deliver additional value. Case in point: implementing lending functionality through API integration is part of a broader approach to delivering a better customer experience.

Let’s explore a specific vertical example: 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.  When a customer needs a new HVAC unit, the plumbing company can present a financing solution at checkout, making the expense more manageable. Once approved, the financing provider pays the plumber in full right away, ensuring the job can proceed without delay.

This model creates value for all parties involved:

• The customer 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.
• 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.

Beyond lending capabilities, APIs can provide seamless money movement with your software’s workflows to simplify payments and reconciliation, leverage a bank-owned for-benefit-of account (FBO) structure, or route payments to your preferred digital channel. Additionally, integrating with a payment gateway can help you and your customers reduce PCI DSS compliance requirements and overall risk via encryption, tokenization, and strict acceptance rules.

Embedded payments + vertical growth strategy 

We’ve all heard the expression, “A jack of all trades, master of none.”  That sentiment underscores an important reality for businesses competing in increasingly complex industries. Taking a vertical or vertical-adjacent approach to capturing market share creates a compelling value proposition for businesses looking for solutions that solve specific challenges, industry regulations, and operational inefficiencies.

The healthcare industry is an extraordinarily complex and crowded ecosystem for software and payments companies. While EHR vendors have saturated the market with electronic health record functionality, providers still struggle to manage data across systems, payers, labs, devices, and applications. For ISVs, this fragmentation creates an opportunity.

ISVs that embed healthcare payments functionality directly into EHR workflows—automating accounts receivable, enabling digital and text-based payment options, and improving revenue cycle management—can address persistent financial and operational gaps. By extending beyond record-keeping into the entire payments lifecycle, these platforms can differentiate in a crowded healthcare IT market while delivering measurable value to providers.

For many software companies, access to a comprehensive partner ecosystem offers a practical path to navigating the complexity of the healthcare industry. By focusing on core competencies while integrating complementary healthcare or payments technology, companies can reduce development timelines and accelerate speed to market. A partnership model also proves to be mutually beneficial, enabling both organizations to increase market share from shared roadmap innovation, referral partner programs, and expanded sales distribution channels.

Whether it’s access to embedded healthcare payments, flexible point‑of‑sale financing, or text-to-pay functionality that helps providers manage their businesses more effectively, embedded solutions create a stickier footprint while generating incremental revenue. Success depends on partnering with a provider that offers the infrastructure to scale alongside your business—while remaining flexible enough to adapt as market needs evolve.

Embedded payments + expanding your geographic footprint

SaaS businesses are well positioned to scale their operations because they can expand into new geographic markets and sales channels more easily than many traditional businesses. As you grow, you need a dependable payments partner to help remove complexity – like simplifying contracts and integrations, enabling global payments and currencies, and helping you stay compliant with regulations in each country you expand to.

Scaling globally also means offering your clients the ability to offer alternative payment methods, including multi-currency and cross-border payments capabilities to enable commerce internationally, create financial efficiencies, and build additional revenue streams. For ISVs looking to expand outside of the US, selecting a payments partner that can seamlessly support embedded finance functionality in markets like Canada can help you grow your revenue potential sustainably – especially with large business opportunities on the horizon. Analysts project the Canadian ISV market* will grow at a 12–15 percent CAGR through 2030, fueled by SaaS adoption, cloud migration, and vertical specialization – representing a massive opportunity to seize market share and support merchants not being served sufficiently by current players.

Embedded payments + scaling your business model

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. For ISVs looking to scale, creating platform loyalty and offering additional services beyond software is critical for long-term success.

In this case, you should consider becoming a payment facilitator (PayFac) to be able to transform payments acceptance from a supporting feature in your software platform to a source of revenue, customer retention, and competitive differentiation. Let’s dive into how this happens:

1. Generate new revenue streams

Traditionally, ISVs earn referral fees by introducing merchants to payment providers. As a PayFac, the ISV can participate more directly by earning a share of transaction revenue, monetizing merchant services and bundling financial products into its platform.

2. Gain greater control of the merchant relationship

The PayFac model allows ISVs to own more of the merchant experience,* including onboarding, pricing, support, and payment functionality. Rather than relying on external processors to manage key customer touchpoints, the ISV can create a branded, integrated experience tailored to its target vertical market.

3. Deliver a better customer experience

PayFacs simplify merchant onboarding and enable businesses to accept payments directly within the software they already use. This creates a seamless experience with faster activations, unified reporting, and fewer third-party relationships for merchants to manage.

4. Increase customer retention and platform stickiness

When payments are embedded into core workflows, merchants become more loyal clients in the long term. Payments become part of everyday operations, making the platform irreplaceable for merchants and strengthening long-term client relationships.

5. Enable embedded finance opportunities

Payments often serve as the foundation for broader embedded financial services such as point-of-sale lending, faster funding, and advanced invoicing. ISVs adopting the PayFac model can expand beyond payment acceptance and deliver a more comprehensive financial ecosystem to customers.

Keep in mind – these benefits also come with additional responsibilities. That’s why it is important to choose a trusted partner to handle merchant underwriting, compliance, fraud prevention, chargebacks, and financial risk.

Embedded payments + Elavon by U.S. Bank

Backed by the strength and stability of U.S. Bank, Elavon can provide the best of both worlds – the financial services infrastructure of one of the country’s most established banks and the agility needed to navigate the competitive software industry and constantly evolving payments industry. 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 enabled 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 move their business forward.

* 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.