How Can ISVs Choose a Payments Partner During M&A Activity?

Payments companies have different priorities. Choose a partner that makes your best interests a priority.

merger acquisition

As an independent software vendor (ISV), you choose a payments partner so you can integrate – or plan to integrate – payments with your solution. With this integration, you give your clients greater back-office efficiency and the ability to respond to changing consumer payment preferences.

However, forces outside your control can interfere with a promising partnership with a merchant services provider. Mergers and acquisitions (M&A) activity can put ISVs in the middle of a partner’s takeover or a big-dollar deal that changes the terms of the relationship. More than one-third of last year’s M&A activity involved companies in tech, making the possibility of instability and upheaval all too real. As a result, it’s essential that you choose your partners carefully.

Benefits of Working with a Privately Held Merchant Processing Company

Working with a large company with a well-known brand might seem like an exciting choice. But you never really know what you’re in for when you go with a company that’s subject to the demands of the public market. They serve shareholders first and often have complex organizations that can slow decision-making and innovation. And if growth and valuation are their priority, M&A is always on the table.

On the other hand, smaller, private companies aren’t burdened by the same scrutiny and restrictive red tape or the pressure to enter into deals to grow into a conglomerate or merge with another company. Choosing a partnership with a privately held merchant services provider can also provide your ISV business with additional benefits, including:

      • Closer relationships with your teamPrivate companies base their business success on forming lasting relationships with their ISV partners and dedicate resources and time to it. They can give you the attention you need during the integration process—and beyond with ongoing support. And they’re ready to assist when your clients run into roadblocks or require customizations.
      • FlexibilityGetting a public company to pivot is like turning a large ship around. But private payment companies are nimble and ready to act on new opportunities. They don’t need board approval on every move or a complex organization to make decisions.
      • Cost-effectivenessA private payments partner could also be better for your bottom line. Public merchant services providers could adjust prices, partner margins, or terms so they can hit their goals. That’s something you won’t run into often when a company isn’t at the whim of investors.
      • Cloud technologyPayment companies with a long history may actually be behind on technology, not on the cutting edge as they might have you believe. Some of their services and solutions may not have been designed for the cloud but rather adapted for it, which can limit performance, functionality, and scalability. Private merchant service providers are more likely to have technology with modern architecture.
      • Better customer serviceIn an age when 80 percent of people switch brands over bad service, you can rest assured that smaller, private merchant services providers will make providing optimal customer service the bedrock of their business strategy. Having a partner who knows that downtime means lost dollars in the high-stakes payments sector is critical to your success. Be sure you partner with a merchant services provider with a “fix it fast” policy that won’t offload you and your clients to inexperienced call center agents or chatbots.

Form Smart Partnerships

With all the time and effort that goes into establishing a relationship with a payments partner and integrating your software with the payments platform, you need to ensure your investment counts. Weigh all the possibilities and don’t overlook smaller, private merchant services providers. They may be your best option for a successful, long-term relationship.

Steve Messemer

Steve Messemer is the Director of POS Products at Electronic Payments, where he helps build strategic partnerships with ISVs and resellers. Connect with him about smart payment, point of sale, and fintech solutions and opportunities on LinkedIn.


Steve Messemer is the Director of POS Products at Electronic Payments, where he helps build strategic partnerships with ISVs and resellers. Connect with him about smart payment, point of sale, and fintech solutions and opportunities on LinkedIn.