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Microsoft Dynamics 365: Embedded Payments for ISVs


Man holding credit card and tablet, paying for online transaction on a platform that has embedded payments integrated

Monetization strategies are a great way for businesses to gain income from existing software solutions.


For Independent Software Vendors (ISVs), integrating embedded payments is one such opportunity.


By collaborating with payment providers, ISVs can earn a percentage of each transaction, or commissions based on payment volumes processed through their software.


David, the owner of an ISV providing customer relationship management (CRM) software, is a great example. David had been looking for new ways to grow his business.


While his clients loved the CRM features, they often struggled with managing separate payment systems. After doing some research,


David learned that by integrating functionality for embedded payments, he could solve a huge pain point for his clients while creating a new revenue stream.

 

This article outlines some of the measures ISVs can take to capitalize on this opportunity, but first, let’s discuss how embedded payments work.

 

Understanding Embedded Payments


Embedded payments are a seamless way to integrate payment processing within software applications to provide a smooth, cohesive user experience.


For ISVs, this is an opportunity to monetize their solutions by partnering with payment providers.


Consider a smart home system that integrates lighting, security, and climate control into one cohesive unit.


Similarly, embedded payments integrate the entire payment process within software applications, ensuring smooth and efficient transactions for users.


Within an ISV solution, the ISV partners with a payment provider to integrate the payment processing API, allowing users to easily make transactions within the software application.


The integrated payment gateway then securely handles authorization, capture, and settlement of payments while ensuring compliance with industry standards like PCI-DSS.


Your users will love the convenience and efficiency of having a streamlined, integrated payment solution. When merchants can handle all their payment needs within your software, they’re more likely to stick around.


Happy and loyal customers are a wonderful thing, but the financial incentives for the ISV may surprise you.


The Financial Opportunity for ISVs


ISVs can create new revenue streams and enhance their offerings' overall value by directly incorporating payment processing into their software solutions.


Here are some of the most effective ways ISVs can capitalize on embedded payments:

  1. Transaction Fees and Commissions: ISVs can earn a percentage of each transaction processed through their software, and many payment providers allow ISVs to receive commissions based on payment volumes. These commissions can create an easy and consistent revenue stream.

  2. Subscription Models: Offering embedded payment functionalities as part of a premium subscription tier allows a company to charge clients extra for the efficiency and convenience of integrated payment processing. Similarly, integrating embedded payments as part of a suite of bundled services can justify higher subscription fees due to the added value.

  3. Integration with Established Platforms: Highlighting integration capabilities with platforms like Microsoft Dynamics 365 Business Central is an ideal way to attract clients focused on comprehensive solutions. This enhanced capability and support can be offered for a fee.


These strategies can help ISVs monetize embedded payments, creating significant revenue sources while enhancing the value of their software solutions.

 

The Revenue Model: Commissions and Percentage of Payment Volumes


There are two revenue models for monetizing embedded payments. Here’s how they work:

Commissions: The ISV earns a fixed amount or percentage for each transaction processed through its integrated payment system. Each time a user makes a payment, the provider shares a portion of the transaction fee with the ISV, creating a consistent revenue stream.

Percentage of Payment Volumes: The ISV earns a percentage of the total payment volume processed through its embedded payment solution. This model scales with transaction growth—the more payments facilitated, the more the ISV earns, encouraging promotion and expansion.


By leveraging commissions and percentage-based models, ISVs can monetize embedded payments for monthly recurring revenue streams, creating sustained financial growth while providing a seamless user experience and enhancing their software's overall value.

 

Benefits Beyond Revenue


The most significant benefits of an ISV-payment provider relationship go beyond financial opportunities, including:

  • Increased User Retention: Customers value the convenience and efficiency of a streamlined, integrated payment solution. ISVs that offer these solutions can provide enhanced customer experience, resulting in a higher likelihood that the user will stick with the ISV's software. Higher retention translates to a more stable and predictable revenue base.

  • Enhanced Data Analytics: The financial data collected through embedded payments can be offered as advanced analytics and reported as a paid add-on. Clients benefit from this data monetization through deeper insights into their business, empowering better decision-making.

  • Strategic Partnerships: Collaborating with an experienced and knowledgeable payment partner can open new opportunities for ISVs to grow their business while earning revenue on transactions.

 

Partnering with the Right Payments Partner


David ultimately made the decision to partner with a payment provider, allowing his clients to manage transactions directly within his company’s platform.


Now, each payment processed through his software earns his company a percentage of the transaction amount.


This collaboration not only enhances the user experience for his clients but also creates a consistent and profitable revenue stream.


David’s software becomes more attractive to potential clients, and his business enjoys the financial benefits of the added payment functionality.


Selecting the right payment provider is essential for fully leveraging the benefits of embedded payments and can greatly influence an ISV’s overall success and growth potential.


A dependable and experienced partner like USTPay will ensure seamless integration, industry compliance, and continuous support.


We provide Microsoft Dynamics 365 Business Central users with more options, including:

  • Processing credit card payments,

  • Collecting pre-payments and deposits,

  • Performing partial or full authorizations,

  • Making batch deposits,

  • Issuing refunds and voids,

  • Sending link-to-pay invoices,

  • Integration with eCommerce platforms,

  • And more


USTPay’s single API connects to over 120 payment gateways and processors for complete freedom of choice, and we support all international currencies.


Our PCI Compliant solution helps reduce processing fees through Visa or Mastercard-compliant Level-3 data.


To learn more about Dynamics 365 Business Central and USTPay integration, visit https://www.ustranscorp.com/ustpay.

 

About the Author:

 

U.S. Transactions Corp., a premier B2B enterprise service provider, collaborates with its clients to deliver an exceptional experience every time, from industry-lowest rates and cutting-edge technology to Level-3 processing that can save your organization up to 30 percent on costs!

 

Since 2009, UST has been a trusted source for Commercial Enterprises, Associations, and Nonprofits looking to maximize their success rate through superior payment solutions designed specifically for them.

 

USTPay is a product of U.S. Transactions Corp. and is available on Microsoft AppSource.

 

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