For decades, payments infrastructure was largely controlled by major financial institutions and legacy processors, with limited flexibility for customization.
However, the rise of open banking, cloud computing and API-first development has changed the equation. Payment platforms are now embracing API-first products and developer-friendly architectures, enabling independent software vendors (ISVs) to build on top of their infrastructure to create bespoke payment experiences.
“Payments have eaten software,” Bryan Long, director of product management at North, told PYMNTS in an interview. “Anything you can think of, there is an app for it, and there are payments embedded within that app… In the past 15 years, ISVs have been experiencing an increasingly significant, new revenue stream thanks to embedded payments.”
This ongoing rise of API-driven payments is altering competitive dynamics. Traditional payment processors must now compete with FinTech startups that prioritize developer-friendly integrations.
“There’s a flood of technology enabling innovation,” Long said. “Anyone with a good idea can now spin up a proof-of-concept over a weekend using AI-powered no-code tools.”
By exposing modular components of the payment stack — such as merchant onboarding, transaction processing, fraud detection and reconciliation — payment providers are empowering developers to create seamless integrations tailored to specific business models. From embedded checkout experiences to subscription billing and marketplace payouts, APIs allow ISVs to innovate without having to build core payment functionalities from scratch.
The transformation of ISVs in the payments space happened over the last few decades, Long said. A paradigm shift came with the payment facilitator (PayFac) model, pioneered by Square in 2009. This allowed software companies to onboard merchants under a single master merchant account, simplifying the user experience but increasing risk exposure.
The paradigm shift also fostered a more competitive landscape, where businesses are no longer locked into monolithic payment processors. Instead, they can mix and match services from different providers, selecting the best tools for their unique requirements. As a result, ISVs are emerging as critical intermediaries, bridging the gap between merchants and digital payments.
“The software companies we work with absolutely want to own the payment experience in their UI and the merchant onboarding experience within their UI,” Long said. “But for the most part, they don’t want to be in charge of underwriting merchants or managing chargebacks and fraud.”
North bridges this gap by offering tools and infrastructure to help ISVs integrate payments while offloading regulatory and risk burdens.
A standout feature of North’s North Developer portal is the Merchant Boarding API. This solution streamlines the traditionally cumbersome process of merchant onboarding, turning what once took weeks into minutes. Long cited the case of First Mile, an automotive services ISV, which digitized its onboarding process using North’s API.
“Previously, their sales agents had to collect merchant applications on paper and fax them in,” he said. “With our API, the entire process is now digital, reducing errors and expediting onboarding.”
“If you’re an eCommerce marketplace or an online store, we have a payment API you can embed,” he added, explaining that the North Developer portal has a payment API for every use case, including in-person payments, online payments and omnichannel payment solutions. “If you want to handle in-person card transactions, we offer semi-integrated solutions using PAX and Ingenico card readers.”
While building enterprise-grade software still requires investment, the barriers to entry for payment innovation have lowered. This shift forces traditional providers to rethink their strategies, embracing open APIs and flexible partnerships to stay relevant.
As digital payments evolve, alternative payment methods (APMs) are becoming increasingly relevant. North supports various APMs, including Apple Pay; buy now, pay later (BNPL) solutions; and Tap to Pay on iPhone.
“Tap to Pay on iPhone is a game changer,” Long said, adding that Tap to Pay on iPhone means merchants can accept payments with just an iPhone and a compatible payment provider app such as North’s Payanywhere.
Beyond payments, ISVs are increasingly offering integrated business management tools. Long categorized value-added services into key areas, with accounting and financial management at the forefront. North has also partnered with Davo, a service that automates sales tax filing, helping merchants navigate complex tax regulations.
“A QuickBooks integration is a must-have for SMBs,” he said, adding loyalty programs, reputation management tools and customer engagement solutions also rank high on the list of desirable features.
“The key is to empower software vendors with the right tools so they can focus on building innovative solutions while we handle the complexities of payments,” Long said.
