Also called: ISV
What an independent software vendor is
An independent software vendor (ISV) develops and sells software for businesses. In payments, that software might run a restaurant point-of-sale system, a dental booking platform, automotive service management, or an online storefront. The term describes the software company. It does not, by itself, mean that company is your bank or payment processor.
An ISV can integrate payment acceptance into the tools you already use. For example, a booking platform might let customers pay when they schedule an appointment, while staff manage bookings and payments in one system. That reduces the need to move between separate tools, but it also connects your payment experience to the platform’s payment setup.
An ISV can put payments inside your software, but the platform’s payment model determines who sets fees and handles risk.
How payments work inside the software
The ISV connects its software to a payment provider, often through an application programming interface. The provider processes the payment, including authorization and settlement. In a traditional ISV arrangement, the provider also handles merchant underwriting, account setup, and ongoing risk monitoring. The platform supplies the screen and workflow where you take payment.
The business responsibilities change if the software company operates as a payment facilitator (PayFac). A PayFac onboards businesses under its own master merchant account and takes on underwriting, risk, and compliance responsibilities. That structure gives the platform more control over onboarding and the fees it charges. Your account relationship and payment terms therefore depend on which model the platform uses.
What the model means for your costs
Your card processing cost still has three parts: interchange paid to the issuing bank, network fees, and processor markup. An integrated checkout does not remove those costs. The platform’s arrangement can add a separate software charge, a transaction-based platform fee, or charges for added payment features such as invoicing or faster payouts.
Those charges do not all represent processor markup, and the amount you can negotiate depends on who sets each fee. In a conventional ISV and processor arrangement, the processor controls processing fees. A PayFac has more control over the fees it collects. That difference matters when a platform presents one combined price, because a higher total can include software or platform charges as well as card acceptance costs.
Payment pricing and billing details are not standardized across ISVs. A platform’s payment terms determine who charges you, what services the charge covers, and how payment support is handled. The ISV label alone does not identify a fee line on your statement or tell you whether a quoted rate includes a platform charge.
Where responsibilities sit
The platform, payment provider, and your business can have different roles in onboarding, fraud prevention, refunds, and disputes. In a traditional processor arrangement, the provider handles core merchant risk functions. The software still controls the payment workflow customers see, so a problem with the integration can interrupt checkout even when the processor is available.
Payment integrations also involve security and compliance responsibilities, including PCI DSS requirements for protecting cardholder data. The provider’s role does not make every platform feature or business process automatically compliant. The contract and integration determine who handles each task, while your business remains responsible for using the payment system correctly.
What you can actually change
- Separate each charge. Compare your software subscription, processing fees, and any platform or transaction charge. Get the purpose of each charge in writing.
- Identify the payment model. Find out whether your account is with a processor or under a PayFac’s master account. Confirm who sets your processing price and who handles disputes and payment support.
- Review the agreement. Look for fee changes, payout timing, refund handling, and what happens to your payment data if you leave the platform.
Frequently asked questions
Is an ISV the same as a payment processor?
No. An ISV builds and sells software. A payment processor handles transaction processing functions such as authorization and settlement. A software platform can integrate a processor’s services into its checkout, so you use both through one system.
Does an ISV set my credit card processing fees?
It depends on the payment model. In a traditional ISV and processor arrangement, the processor handles processing fees. A platform operating as a PayFac has more control over the fees it collects. Review your pricing and agreement to distinguish processing costs from software or platform charges.
Will ISV payment fees appear on my merchant statement?
There is no universal ISV fee line or statement format. The platform’s billing arrangement determines where its charges appear and who bills you. Compare your merchant statement with platform invoices and your written pricing so you can identify separate software and payment charges.
Can I use an ISV without embedded payments?
Yes. An ISV is a software company, and its product does not have to include payment acceptance. Some business platforms integrate payments, while others focus on functions such as scheduling, inventory, or business management.