When it comes to payment processing, many acronyms are often thrown around and interchanged for one another. ISOs (independent sales organizations), and ISVs (Independent software vendors) are two of the most popular terms. In this article, we will break down the difference between the two and also talk about our credit card processing referral programin case you’re an ISV or ISO looking for a partnership.
At Corepay, we work closely with ISVs and are registered ISOs with our own BINs in Europe and the US. Let’s examine the roles of ISVs and ISOs.
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What is an ISO?
An Independent Sales Organization (ISO) acts as a link between payment processors and merchants. ISOs’ primary role is to find merchants, sell payment solutions, and provide post-sale support. They serve as the front-facing representatives of payment processors, allowing these processors to focus on transaction management.
Key characteristics of ISOs include:
- Client-Facing Role: ISOs handle everything from merchant onboarding to ongoing support.
- Independence: ISOs can work with multiple acquiring banks to find the best solutions for merchants.
- Revenue Model: ISOs primarily earn through residuals—a percentage of each transaction processed by the merchants they serve.
ISOs also add value by tailoring their services to specific industries.
What is an ISV?
Independent Software Vendors (ISVs) develop and sell software that often includes integrated payment processing capabilities. Unlike ISOs, ISVs are technology-focused organizations that create software solutions for businesses across various industries.
Key characteristics of ISVs include:
- Software Development: ISVs create tools such as point-of-sale (POS) systems, eCommerce platforms, and automated onboarding software.
- Niche Focus: Many ISVs specialize in specific verticals, such as hospitality or retail, to offer specific solutions.
- Revenue Model: ISVs generate revenue through licensing or Software-as-a-Service (SaaS) agreements, ensuring steady income through subscriptions.
Examples of ISVs include Stripe, Square, and Lightspeed, which provide payment technology alongside their software offerings.
Key Differences Between ISOs and ISVs
Criteria | ISO | ISV |
---|---|---|
Primary Role | Sells payment solutions | Develops and sells software |
Revenue Model | Residuals from transaction fees | Licensing or SaaS agreements |
Customization | Limited to solutions from processors | High flexibility for tailored software |
Technology | Resells technology from processors | Innovates and creates new technology |
While ISOs focus on merchant accounts and payment processing services, ISVs emphasize creating software that integrates payment capabilities into broader business systems. This distinction underscores the unique value each brings to the table.
Overlaps and Synergies
The roles of ISOs and ISVs are no longer as distinct as they once were. Today, these organizations often collaborate to enhance their offerings. For instance:
- ISOs resell software solutions developed by ISVs, giving merchants access to integrated systems.
- ISVs, in turn, may rely on ISOs to provide backend processing for their software platforms.
A prime example of this synergy can be seen in the relationship between Clover and Fiserv. Originally developed as an ISV, Clover’s acquisition by Fiserv transformed it into a solution that ISOs can now resell.
*** Want to learn about the difference between payfacs and payment processors?
How We Bridge the Gap At Corepay
Corepay, as a registered ISO with its own BINs in Europe and the United States, is uniquely positioned to serve the needs of both ISOs and ISVs. By offering targeted programs, we ensure that businesses can maximize their potential in the payments space:
- ISV Referral Program: This initiative helps ISVs incorporate payment processing into their platforms seamlessly.Corepay offers expertise in compliance, security, and scalability, enabling ISVs to enhance their software and provide merchants with comprehensive solutions.
- Credit Card Processing Referral Program: Corepay works as an ISO to deliver dependable payment processing options. This program supports agents in expanding their service offerings and increasing revenue streams while maintaining a high level of merchant satisfaction.
The Future Of Digital Payments
The growth of digital payments has opened up significant opportunities for ISOs and ISVs. Analysts predict that thenumber of ISVs worldwide will surpass one million by 2025, signaling a growing demand for innovative software solutions.
At the same time, ISOs are finding new ways to remain competitive by partnering with ISVs or adopting hybrid roles that combine elements of both.
For instance, ISOs with a strong focus on customer support and fraud prevention are increasingly bundling their services with ISV-developed software to offer merchants a more comprehensive package. Meanwhile, ISVs are exploring direct-to-merchant sales models to complement their traditional B2B offerings.
Why Partner With Corepay?
Corepay stands out by providing customized solutions that meet the unique needs of both ISOs/agents and ISVs. Our programs are designed to streamline operations and create value for all stakeholders in the payments ecosystem.
Whether you’re an agent looking to increase your merchant offerings or an ISV trying to integrate payment processing into your platform, our expertise and resources make us an ideal partner.
Conclusion
ISOs and ISVs each bring valuable capabilities to the payments industry, and their roles are becoming increasingly intertwined. By understanding these roles and leveraging partnerships with organizations like Corepay, businesses can unlock new opportunities and deliver exceptional payment experiences to their customers. Whether you’re interested in Corepay’s ISV referral program or credit card processing referral program, the path to success starts with choosing the right partner.