Against this backdrop, 65% of ISVs and marketplaces that do not yet have payment capabilities plan to incorporate embedded financial products for payment acceptance this year, according to findings detailed in a recent study conducted by PYMNTS Intelligence in collaboration with Carat from Fiserv.
This move, per the study, would put them in line with the roughly 75% of ISVs and marketplaces who already have payment capabilities and want to improve their integrated financial products this year.
On average, more than 80% of ISVs expect to see a rise in revenue share from payment acceptance in the next 12 months, indicating a high degree of trust among payment providers.
Specifically, 94% of ISVs in retail sales and 75% in wholesale trade or logistics anticipate a noticeable increase in the proportion of their total revenues derived from payment acceptance during the period, as do 60% of multimedia or telecommunications ISVs and nearly 82% of ISVs categorized as software producers and publishers.
When it comes to marketplaces, nearly 70% on average expect the share of total revenues coming from payment acceptance to be significantly or somewhat higher in the next 12 months. This breakdown includes 83%, 60% and 55% of marketplaces in wholesale trade or logistics, retail sales, and software production and publishing, respectively. Interestingly, all the multimedia or telecommunications marketplaces surveyed expressed the same expectations.
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Further data suggests that payment facilitators (PayFacs), which enable payments for 39% of ISVs and 78% of marketplaces that accept them, play a critical role for those facilitating payment acceptance. According to PYMNTS Intelligence research, nearly 60% of PayFacs only accept digital payments made online or via an app.
It also seems that a company’s size affects whether embedded payments are used and accepted, especially for ISVs. For instance, PayFacs are typically used more by larger ISVs to process payments, with only 21% of those with revenues between $50 million and $250 million doing so, compared to 59% of those with revenues of $1 billion or more. On the other hand, there is a less clear connection between payment facilitation and marketplaces of various sizes.
Drilling down into the data further reveals that while marketplaces strongly favor PayFacs, ISVs prefer a wider variety of payment processing techniques. In fact, 78% of marketplaces use sub-merchant accounts, while 62% of ISVs keep merchant accounts with traditional acquirers, the data shows.
