Learn about payments and the payment facilitator model from our team of experts

Why Vertical Software Companies Are the New Payments Companies


Software companies are rapidly becoming the primary way businesses accept payments from their customers.

Old-school payment terminals are slowly fading out of existence, the few remaining ones desperately clinging to every dive bar that has yet to upgrade to a modern payment solution. They’re being replaced by iPads or other sleek devices.

At the same time, tech giants like Uber and Amazon have created payment processes so seamless and intuitive that sometimes it doesn’t even feel like you’re using your credit card.

As consumer expectations are changing in response to these trends, businesses are undergoing their own transformation. Across every vertical – from salons that need to manage inventory and book clients to plumbing companies that need to juggle schedules for technicians in the field – businesses are increasingly managing their day-to-day operations using comprehensive solutions offered by software companies.

These software companies are masters at identifying problems their customers have in running their businesses, then creating product features that provide the solutions to those problems.

And of course, one business need that transcends all verticals is the need to accept payments from customers. Those evolving consumer expectations mean that payments can no longer operate under a one-size-fits-all model. Those salons might want to allow their clients to book and pay for appointments using the same system. The plumbing companies might want their technicians to be able to accept payments while they’re at a job, rather than sending an invoice later and waiting for payment.

Software companies, being the problem solvers that they are, figured out that, in order to provide a complete business solution to their customers, they also have to provide a solution for processing payments. Who better to provide payments than the software company that is already ingrained in those customers’ business?

These companies first began connecting their software to third-party payment solutions, giving customers a way to manage their businesses and accept credit card payments from their own customers and end users.

However, with this third-party solution comes a couple of problems. First and foremost, the software company is now giving control of their customer’s experience to a separate payments company that may not fully understand or be able to deliver solutions for the specific needs of their vertical. Secondly, the software company misses out on high-margin payments revenue, which flows to the payment provider instead.

Many software companies are finding that the next logical step in this evolution – the better solution to these problems – is taking more control over payments using a Payfac-as-a-service solution like Infinicept’s Launchpay. This allows them to customize more of the payment experience, tailoring it to their specific vertical and taking a bigger bite out of the payments revenue pie.

These companies know their specific customer base better than any horizontally focused payments company ever could. Now they can choose the gateway, payment devices and services (like Buy Now, Pay Later or real-time billing) that their customers need. They can also customize the onboarding process with branded applications and underwriting based on their industry. And finally, they’ve become the single point of support for their customers’ needs, avoiding the frustration of having to route them over to a third party for payments-related issues or questions.

Some companies opt to go even further to become Payfacs themselves, accepting all of the payments risk while also gaining full control over their customers’ experience and bringing in 100% of the payments revenue.

Now that there are payment platforms like Infinicept’s PayOps offering that allow software companies to bring payments in-house more easily, owning payments is not just reserved for the tech giants of the world. Vertically specific software companies like WorkWave in the field services industry, Modernizing Medicine in the healthcare industry, and TapGoods in the rental industry have all began offering their own payment solution to their customers – one that is deeply engrained in their overall offering.

By taking more control over the payments on their platform, all of these software companies have actually become payment companies. Doing so has allowed them to deliver complete solutions that fit the needs of their customers, and to do it their way.

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