By Paul Clarke
Cashflow
As the UK fintech industry begins to emerge from a period of economic downturn, and with the new government pledging to "embrace" the fintech sector, with its potential to deliver nearly £330 billion/$420.7 billion (see bit.ly/41K2WaL) over the next five years, the timing is prime for businesses to explore new partnerships, particularly in the payments sector.
One of the most advantageous alliances is between independent software vendors (ISVs) and innovative payments companies, embedding services that benefit the end user. But it is not just consumers that benefit from seamless and secure customer experiences that are now expected.
Payments can be a daunting place, but ISVs can feel the benefit too, deepening engagement, fostering return customers and ultimately, helping them grow and their communities to thrive. This isn't a concept; it's fact. Cashflows' research found that 70 percent of small businesses want this.
But what are some of the other benefits of these collaborations? Let's explore the infinite possibilities in the UK as well as in the United States and other global markets.
Integrating or embedding payments into a product is typically a complex and resource-intensive task. For ISVs, the world of payments can be a daunting prospect. The process requires substantial investment in both time and capital, not to mention the need for specialized knowledge in payment technologies and regulatory compliance.
However, it doesn't have to be this way. In fact, ISVs don't often realize the benefits of integrating a payment solution within their product offering. By partnering with a payment company, ISVs can leverage an established infrastructure that has been rigorously tested and proven in the market.
This allows them to focus on their core competencies, enhancing the customer experience while offering their clients a seamless, reliable payment solution. It's secure hosted payments fields built by them. Our research also found that across the UK and Europe, over a third of small businesses are interested in financing their needs via an integrated offer from their SaaS provider.
Furthermore, these partnerships often include support and resources that help ISVs integrate and manage the payment systems more effectively, ensuring that they can deliver a superior service to their end customers. Companies want it, and it's here for them.
Despite the clear benefits and advantages, some companies could be hesitant to partner up, possibly due to concerns or perceptions about the complexity. Additionally, by embedding payments into their offering, they might fear losing control over the payments process. However, I'd argue that these concerns are often based on misunderstandings, and here's why.
Firstly, ISVs won't build their own payment software from scratch – that would be too costly and time consuming, with serious ramifications if they got anything wrong. Instead, they have a choice between embedding a third-party payments solution or foregoing one completely.
Some ISVs may be wary of integrating payments, believing it to be a liability best left up to their customers to handle, but many will have to look at the various vendors of embedded payments, some of which will be more willing than others to work closely with ISVs and evolve their relationship over time.
Concerns about ownership are also largely unfounded. While it is true that using a third-party provider means that the payment infrastructure is externally managed, this does not translate to a loss of control over the customer experience.
Actually, on the contrary, partnering with a specialist can enhance the customer experience by ensuring that the payment process is smooth, secure and reliable – and it offers more control around designing and inputting into the checkout experience. ISVs retain full control over how they integrate and present the payment functionality within their own products, allowing them to maintain their brand identity and user experience.
Moreover, working with a partner brings additional benefits such as advanced fraud detection, customer support and ongoing innovation. By continuously investing in their own technology to stay ahead of industry trends and regulatory changes, partners today keep a competitive advantage. This means their partners can benefit from the latest advancements without having to make those investments themselves.
The synergy between ISVs and payment providers creates a powerful value proposition – and it's already in practice. It allows ISVs to offer comprehensive payment solutions without the associated development and compliance burdens.
This model is perfect in the fast-evolving fintech landscape, where staying competitive requires both agility and expertise to continually meet higher expectations from consumers.
By leveraging the strengths of established payments companies, ISVs enhance their product offerings (not detract them), improve customer satisfaction, and accelerate their growth.
On a broader scale, a strategic partnership approach is a necessity to thrive in today's competitive market and plays a crucial role in driving innovation and success that helps communities to thrive. 
Paul Clarke, chief growth officer at Cashflows, has a wealth of experience leading product, business strategy and innovation functions in the payments, ecommerce and digital sectors. He was previously executive vice president for product and innovation at international payments solutions provider Network International. He also held leadership positions at such key payment organizations as Barclaycard, Elavon and Worldpay. At fintech payments company Cashflows Paul is responsible for leading the product proposition, strategy and commercial go to market delivery functions of the business. Contact him via LinkedIn at www.linkedin.com/in/paul-clarke-890735. For more information about Cashflows, visit www.cashflows.com.
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