For independent software vendors (ISVs), payments are no longer simply a feature to add to a platform. They are an increasingly important part of the broader customer experience. Combined with embedded financial services, they can help ISVs differentiate their platforms, deepen customer relationships and generate new revenue streams.
The shift is already underway. In 2025, roughly 90% of U.S. merchants reported using an ISV solution for payments or business management.[i] At the same time, analysts project the global ISV market will grow from $4.12 billion in 2026 to $9.44 billion by 2035.[ii] As the market expands, the challenge isn’t simply participating in that growth, it’s giving customers more reasons to choose, and stay with, one platform.
Moving Beyond Payment Acceptance
Leading ISVs are expanding beyond basic payment functionality to incorporate tools such as accounts payable and receivable automation, lending, invoice and tax management, payroll and financial reporting. These capabilities can help software providers address a broader set of customer needs without losing sight of the vertical-specific functionality that initially made their platforms valuable.
Consider embedded lending. A home-services software provider could integrate financing within its platform, so a plumbing or HVAC company can offer customers financing for unexpected or higher-cost projects at the point of sale. Once the lender approves the financing, the service provider can receive payment while the customer gains greater flexibility in managing the expense.
The software company, meanwhile, expands its role within the customer’s operations and generates additional revenue from lending activity.
This illustrates a larger strategic point: embedded finance can turn payments from a transaction into part of the software company’s overall value proposition.
Vertical Expertise Can Become a Competitive Advantage
The opportunity becomes especially compelling in complex industries. Healthcare provides one example. Providers often operate across electronic health records (EHRs), payers, laboratories, devices and applications, creating fragmented financial and operational processes.
ISVs can help address these gaps by embedding payment financial functionality directly into healthcare workflows, including accounts receivable automation, digital and text-based payment options, and revenue cycle management capabilities. Instead of functioning solely as a record-keeping platform, software can play a broader role across the payments lifecycle.
The same principle can extend across verticals: understanding the customer’s specific operational challenges helps determine where payments or financial services can remove friction. Strategic partnerships can help ISVs bring those capabilities to market while maintaining focus on their core technology.
Build for Scale, Not Just Today’s Opportunity
Embedded finance strategy should also consider where an ISV wants to grow next. Expanding into new channels and geographies introduces additional considerations, from integrations and currencies to compliance requirements and alternative payment methods. Business model evolution is equally important, as embedded finance and SaaS have helped accelerate the payment facilitator (PayFac) model. This approach can simplify onboarding and underwriting, streamline risk management, and support regulatory compliance. Deeper payment integration can also unlock transaction-level data that informs business insights, personalized experiences, pricing strategies, and new service tiers.
Ultimately, the question for ISVs is shifting from “Should we offer payments?” to “How can payments and financial services advance our long-term growth strategy?” The answer will depend on the markets they serve, the customer problems they are uniquely positioned to solve, and the business model they want to build.
Turning embedded finance strategy into growth requires more than technology. It also requires a payments partner that can support the business model an ISV is building toward.
The Connecting Force Behind Smarter Payments – U.S. Bank | Elavon
Elavon can help ISVs turn that strategy into action. Backed by the strength and stability of U.S. Bank, Elavon combines financial services infrastructure with decades of experience working with partners. Whether you’re looking to embed payments and financial services, expand into new markets, or evolve your payments model, connect with Elavon to explore a payments strategy built to scale with your business.
[i] McKinsey & Company, 2026
[ii] Business Research Insights, 2026
