After everything you have invested in building your platform, payments should be doing more than simply moving money from point A to point B. If payments are only processing transactions, you’re leaving meaningful revenue and strategic value on the table.
For many integrated software vendors, payments start as a necessary cost of doing business. But today, payments have evolved into a powerful revenue lever available to software platforms. When done right, payments can generate recurring revenue, increase customer retention, and strengthen your platform’s long-term value.
What Does Payment Monetization Mean for ISVs?
ISV payment monetization is the practice of generating revenue from the payments that flow through your software platform.
Instead of relying solely on things like subscription fees, software vendors can earn revenue when their customers accept and process payments within the platform. This shift has been accelerated by embedded payments and embedded finance, which allow financial services to live directly inside software rather than being handled by third-party tools.
Payments are uniquely positioned to create recurring, scalable revenue because they are usage-based. As your customers grow and process more transactions, your payment revenue grows with them.
Common ISV Payment Monetization Models
Interchange Revenue for ISVs
Interchange is a fee that already exists within every card transaction. It is set by the card networks and paid by the merchant’s bank to the customer’s issuing bank.
In a traditional payment setup, this interchange revenue flows entirely between banks and processors. The ISV, despite enabling the transaction inside its platform, does not participate in that value.
With an interchange monetization model, integrated software vendors can earn a portion of the interchange generated by transactions processed through their software. The customer’s total processing cost does not need to increase. Instead, the ISV shares in revenue that already exists.
Why ISVs choose interchange-based monetization:
- Recurring revenue tied directly to transaction volume
- Revenue scales naturally as customers grow
- No need to introduce new customer-facing fees
- Minimal disruption to the user experience
Things to be aware of:
- Revenue is volume-dependent, so smaller or lower-volume customers may generate less impact initially
- Requires the right payments partner to structure interchange participation properly
Best-fit scenarios
Interchange revenue works well for ISVs with a large or growing merchant base, consistent transaction volume, and a long-term focus on scalable revenue rather than short-term gains.
Payment Revenue Share Models
Payment revenue share models are another common way ISVs monetize payments. In this structure, the ISV earns a portion of the overall processing revenue generated through its platform, based on an agreement with its payments partner.
Revenue share models are often simpler to implement and can provide more predictable income earlier in an ISV’s growth journey, particularly because the payment partner typically handles the heavy lifting, allowing the software vendor to focus on its core product.
How revenue sharing works:
- Payments are processed through the ISV’s platform
- Processing revenue is generated
- A portion of that revenue is shared with the ISV based on agreed terms
Benefits of revenue share models:
- Faster time to market
- Predictable, recurring revenue
- Less complexity around pricing and setup
For ISVs prioritizing speed, simplicity, and early monetization, revenue share models can be an effective starting point.
Beyond the Basics: Expanding Payment Monetization
Embedded Finance Revenue Streams
Embedded payments are often the first step in embedded finance. Once payments are integrated, ISVs can expand into additional financial services that drive incremental revenue and, in turn, deeper customer engagement.
Embedded finance allows software vendors to offer financial services directly within their software, creating new revenue streams while making the platform more valuable to customers.
Common examples include:
- Lending based on transaction history
- Instant or same-day payouts
- Embedded business bank accounts
- Card issuing for spending and expense management
When customers adopt these services, average revenue per user can increase as more financial activity flows through the platform. In fact, over 70% of mid‑market platforms say embedded finance has increased their ARPU.
At the same time, deeper financial integration can strengthen retention by making the software more central to daily operations. When your platform supports both workflows and financial management, it becomes a more integrated and valuable part of how customers run their business.
Value-Added Payment Features
Value-added payment features allow ISVs to monetize payments through premium functionality rather than base processing. These features are optional enhancements that customers choose because they solve real operational challenges.
Examples include:
- Advanced reporting and analytics
- Fraud prevention and chargeback management tools
- Faster funding options
- Multi-location or multi-entity payment support
This approach aligns closely with product-led growth. Customers start with core payment functionality and upgrade as their needs evolve. Revenue increases naturally as customers see value and opt into additional capabilities.
Common Payment Monetization Myths ISVs Should Avoid
Integrated software vendors might hesitate to monetize payments due to common misconceptions. Clarifying these myths can help leaders see payments as more of a growth opportunity rather than a risk.
1: Monetizing Payments Means Charging Customers More
In many cases, payment monetization does not require raising prices or adding new fees. Models like interchange revenue sharing allow ISVs to earn a portion of existing transaction economics, without changing what customers pay. When done correctly, monetization happens behind the scenes and aligns ISV growth with customer success.
2: Only High-Volume Platforms Benefit from Payment Revenue
While transaction volume matters, adoption and integration matter just as much. Even smaller or mid-stage software vendors can generate meaningful revenue when payments are embedded into core workflows and widely used across the customer base. Designing for monetization early allows revenue to scale naturally as the platform grows.
3: Payments Will Distract Us from Our Core Product
Modern embedded payment platforms are designed to minimize operational complexity. With the right partner managing infrastructure, compliance, and reporting, ISVs can focus on product innovation while payments enhance the user experience and generate incremental revenue in the background.
The Takeaway?
Payment monetization doesn’t have to be complex, disruptive, or customer-unfriendly. When approached strategically with the right partner, like Celero Fusion, it becomes a scalable, low-friction extension of the core product.
Choosing the Right Monetization Strategy for Your ISV
There is no universal approach to payment monetization. The right strategy depends on your business model, customer base, and long-term goals.
If Speed and Simplicity Are Your Priority
Consider: Revenue Share Models
Revenue share is often the fastest way to launch because the payment partner manages infrastructure, compliance, and risk. It provides predictable, transaction-based income without requiring you to build payment operations internally.
If You Want More Control over Pricing and Margins
Consider: Interchange-Plus or Hybrid Models
These structures can offer greater transparency and flexibility in how revenue is structured. They may require deeper involvement, but can support stronger long-term margin optimization.
If Your Customers Have High Transaction Volume
Consider: Interchange Participation or Expanded Monetization Layers
Higher volume creates more opportunity to capture meaningful payment economics and layer in value-added services.
If Your Goal Is Long-Term Revenue Expansion
Consider: Embedded Finance Beyond Payments
Lending, instant payouts, or financial accounts can increase ARPU and deepen platform engagement over time.
If Internal Resources Are Limited
Prioritize a Partner-Led Model
When compliance, underwriting, and risk management are handled by your payment partner, your team can stay focused on product development and growth.
Ultimately, the most successful ISVs approach payment monetization as a long-term strategy and not a one-time integration.
Key Takeaways and Next Steps
Whether through interchange revenue, revenue sharing, embedded finance, or value-added features, payments can evolve from a necessary function into a natural, meaningful growth engine.
Success, however, depends on both the model and the partner behind it. The right payments partner provides flexible monetization options, manages the operational complexity of compliance and infrastructure, and understands the unique dynamics of ISV business models. With the right support in place, software vendors can focus on building great software while payments seamlessly operate in the background.
That’s where we come in. Celero Fusion was explicitly built for integrated software vendors. With dedicated support and a foundation built on genuine partnership, we offer solutions designed to grow with you.
If you are ready to take the next step, Celero Fusion can reduce complexity, support your payment monetization strategy, and help your platform grow with confidence.
Let’s talk about how we can help you move forward. Contact us today to learn more!