7 Steps To Help EHR Software Providers Grow Their Userbase and Revenue

Electronic health records, or EHR software, are a staple in modern healthcare organizations. Their ability to maintain accurate and easily accessible patient records across facilities has helped physicians provide better care to their patients. 

More than 96% of hospitals use some form of EHR system to maintain records, which is good because it shows clear demand for the software. 

But in such a saturated market, selling your EHR software and expanding your user base can be difficult. 

If you want to increase the user base and boost the revenue of your EHR software, you need the right tips for marketing. Here’s a step-by-step strategy you can use to boost sales for your EHR tools:


  • Electronic health records, or EHR, is a software used to maintain patient records across multiple facilities. The majority of hospitals already use EHR software, making the market saturated. However, the right strategy and tips can help expand an EHR software’s user base.
  • Understanding the market, providing advanced features, and collaborating with other ventures in the healthcare technology market help boost EHR software sales.
  • Integrating the EHR software with payment processing tools like Stax Connect also helps create an all-in-one platform that simplifies workflow management at hospitals and other medical practices.
Learn More

Understand Your Market

If you want high ROI for your sales efforts, you need to sell to your target market. Broadly, you can market EHR software to:

  • Hospitals
  • Private practices
  • Specialty clinics
  • Nursing homes
  • Mental health facilities
  • Government medical bodies
  • Labs and diagnostic centers
  • Pharmacies

While all these healthcare ventures use EHR, the features and capacity of your software may be better suited for a particular target group. 

For example, if your EHR software has a dedicated feature to maintain image records, you can sell to healthcare facilities that rely on visual progress to monitor the patients’ progress. These include dermatologists, plastic surgeons, oncologists, and dentists. 

You also need to know what the current EHR systems lack to identify market gaps. Perhaps, there are very few EHR tools that accommodate multiple specialties in a single system. Or, clinicians might want software that doesn’t have a steep learning curve. 

Using this information in your product development will help you create software that addresses customer requirements and has a high demand.

Enhance EHR Software Features

The global EHR market is projected to be valued at $47.25 billion by 2027. With several new and established players in this growing market, you need to introduce novel features to distinguish your product from competitors and improve functionality.

One such in-demand feature in healthcare technology is artificial intelligence (AI). The use of AI, ML, and big data can help improve data management accuracy, speed up medical data entry, and simplify routine practices for medical staff. 

Artificial intelligence can be used in EHR for e-prescribing treatment plans, personalizing patient care, and analyzing health information. Combine it with big data analysis, and you can evaluate and automate treatment suggestions, create customizable medical plans, and enable clinical decision support — all within your EHR.

Another area to focus on is to enhance the usability. EHR software is accessed by a lot of people with varying degrees of expertise. While the receptionist or data entry professional generally manages electronic medical records, sometimes the nurses or doctors themselves may want to use it.

In such situations, having EHR software with intuitive features and a quick learning curve helps. Creating a user-friendly EHR tool will make it accessible to people with little to no technical knowledge.

Compliance with healthcare regulations

Regardless of the features you introduce, all EHR software should be in compliance with industry regulations. Since EHR holds healthcare data, you must take steps to make it HIPAA compliant. 

You can ensure this by taking care of the following factors:

  • Physical safety: Devices that host EHR should be accessible only by the required professionals.
  • Authorization: Only professionals who need to access patient information should have EHR passwords and credentials.
  • Technical security: Security software, such as firewalls and malware detectors, should be in place on devices hosting EHR.
  • Interoperability: EHR data, such as medical history, lab results, and diagnoses, must be shared only through secure channels.

Market Your Product

Physicians, hospital managers, and healthcare providers are present both online and offline. If you want to maximize your reach to the target audience, you need to employ both digital and traditional marketing methods.

Consider digital marketing 

There are several digital channels through which you can market your EHR software. If you have a dedicated website or social media presence, you can build an online customer base for your product through the following tactics:

  • SEO: Search engine optimization (SEO) helps your website rank better on search engine result pages, boosting organic traffic to your website.
  • Content marketing: Content marketing uses blogs, videos, and infographics to inform your audience about the product and boost sales.
  • Social media marketing: Through SMM, you can use short videos, reels, posts, and even paid ads to attract and convert leads from social media platforms.

Use traditional marketing approaches

Even with the growing popularity of telehealth, modern medicine still has a largely offline presence. Traditional marketing methods help you target those medical organizations that prefer practicing offline.

  • Attend tradeshows: Healthcare tradeshows are an excellent place to interact with medical professionals and introduce them to your product in person.
  • Direct mailing: You can also market your product by sending brochures and business cards directly to the mailing addresses of healthcare businesses.

Showcase case studies and testimonials from satisfied users

Regardless of the type of advertising, customers have a higher trust in consumer reviews. More than 92% of B2B buyers are likely to purchase a product after reading a trusted review about it.

If your product already has a few users, you can create case studies and collect testimonials to display online. This will create good word-of-mouth, boosting sales and improving the brand image of your EHR software.

Partner and Collaborate

The healthcare technology market comprises a network of healthcare professionals and organizations. Leveraging this network to market your EHR solution will help you increase revenue through referrals and recommendations.

One way to tap this network is by collaborating with healthcare organizations and influencers. You can either offer free trials of your software or coupons and discount codes in exchange for recommending your product. 

Large organizations also rely on multiple technical solutions, such as revenue cycle management (RCM) software and payroll tools. You can partner with such brands to integrate your EHR software within their solution, which helps streamline the entire workflow into a single platform.

Additionally, you can attend conferences, tradeshows, and networking events to connect with brand representatives from around the globe and explore international opportunities.

Price Your Product

The price of your EHR software is one of the first factors customers consider when making purchasing decisions. That’s why, choosing the right cost and pricing model is essential to improve EHR sales. 

EHR software can be priced in two ways. You can either choose a one-time fee model where customers purchase lifetime access to the product for a large, one-time payment. Or, you can choose a subscription-based model where customers pay every month to access product features. 

Both models have their own pros and cons. Subscription-based models generate a small but recurring revenue every month. On the other hand, the one-time fee model generates a large amount of revenue during the time of sale. 

The right pricing model for your EHR product depends on your customer persona. For example, a small-scale private practice may not be able to afford a one-time fee for certified EHR software. Such buyers may choose your product if you offer an affordable alternative—the subscription model.

Regardless of the model you choose, it’s crucial to keep the prices in accordance with the market value. Pricing your product too low may not generate sustainable profits in the long run. But if you price it too high, customers may not want to purchase it.

The best solution is to adopt a value-based pricing model. Set a price or create multiple pricing tiers based on the features you offer and the benefits it brings to the clients. 

Offer Payment Processing

In addition to using EHR software, hospitals, and clinics also use some kind of medical billing tools to collect payments from patients. However, using separate software for billing creates hassles as they need to maintain patient data in two different solutions. 

Offering an integrated payment processing tool creates an all-in-one EHR solution for your clients. Users can keep track of billing history, pending payments, and reimbursements through the same software used to track patient records. 

When choosing a payment processing tool, you also need to consider security measures such as encryption, restricted accessibility, and compliance, which are essential in processing medical payments.

Stax Connect is an excellent platform you can use to integrate payment processing in your EHR solution. It uses a single API for all functions and supports custom integrations for all types of software requirements.

The platform is also PCI compliant, making it a great choice for healthcare-related payment processing. With reporting capabilities, user roles and permissions, and seamless payment support, Stax Connect can help your users securely process payments within the EHR software.

Train Users and Support Them

Along with the functionality and competitive pricing, extensive user support is also essential in marketing your EHR software. If your product has a steep learning curve or elaborate features, provide adequate resources to train new users.

These resources include video tutorials, mock templates, and written guides. You can make these resources easily accessible to your clients by either hosting them on your website or creating a separate knowledge base that your users have exclusive access to. 

However, even with training, users might still have queries and issues when using the product. Providing them with live chat or call support helps solve these queries in real-time, improving the overall customer experience.

Expand Your EHR Software User Base

Marketing your EHR software is easy with the right strategy. By identifying the target audience, introducing advanced features, and integrating the right tools like Stax Connect, you can expand your EHR software customer base and boost revenue.

However, the healthcare technology market is constantly evolving. Keeping your product up-to-date with continuous improvement and adaptation helps your product stand out in the EHR software market in the long run.

FAQs about EHR Software

Q: What is EHR software?

Electronic health record (EHR) software is a system that helps maintain and access a patient’s medical history, health records, prescriptions, and other medical information in a digital format. 

Q: What is the most popular EHR system?

There are several EHR vendors that provide popular EHR systems. Some widely used systems in the US are Cerner, Epic, eClinicalWorks, and Athenahealth. 

Q: What is the difference between an EMR and an EHR?

An electronic medical record (EMR) is software that only contains the patient chart of one healthcare practice. An EHR is software that has the medical history and patient records that can be accessed across multiple practices.

Compared to an EMR system, EHR systems also have more functionality. They help get an overview of a patient’s reports, insights into their treatment, and real-time updates on their lab reports and test results. An EMR software simply helps healthcare workers maintain patient records in their respective facilities.

Q: What is an example of EHR?

The software used at your dentist’s office is a good example of an EHR. The receptionist can access your previous records through the software to set appointment reminders. The doctor can use it to check previous scans and dental records to determine the course of treatment. And you, the patient, can access all the records through the connected iOS app to keep track of your dental history. 

Q: Do hospitals have EMR or EHR?

Hospitals can use EMR, EHR, or both. Some small hospitals and private practitioners use only EMR as a limited number of people need access to the records. However, larger hospitals and care facilities use EHR so all the required professionals can access patient records, irrespective of their location.

Beyond PCI Compliance: Why Data Security is Key to Growth and Success [Webinar Recap]

When you think about growing your business, improving data security probably isn’t at the top of your list—and that’s understandable. After all, the topic of security doesn’t sound as exciting as that latest Instagram hack and isn’t as immediately impactful as a new sales tactic. 

However, the last thing you want to do is neglect data security. Having a secure platform for managing customer and payment data is paramount to building and maintaining trust, and you can’t do that with poor systems and practices. 

In our latest webinar, Garrek Harris, Director of Platform Management at Stax, discussed the ins and outs of data security for merchants and ISVs. We talked about PCI compliance (and beyond) and what organizations can do to stay on top of all things data security. 


  • Data security and PCI compliance are critical for growth. They build trust with customers and protect you from liability so you can continue to invest in your business. 
  • When data breaches occur, fees and liabilities are passed down from processors to acquirers and ultimately to ISVs and merchants.
  • Choosing the right payment partner with a solid security track record is crucial for enhancing data security and complying with PCI DSS standards. 
Learn More

What is PCI compliance?

Short for Payment Card Industry Data Security Standard, PCI DSS ensures the safe handling of sensitive payment information. It establishes safeguards for credit cards and other payment data and is designed to protect consumers and merchants from breaches and fraud.

Garrek says it best: “PCI compliance is a series of requirements put forth by the card brands that every merchant who wants to accept credit cards has to adhere to. And if they do not adhere to it, there are various penalties.”

The importance of PCI compliance  

PCI DSS applies to any organization—small businesses, payment processors, payment gateways, ISOs, PayFacs, and more. 

In short, everybody involved in the chain of credit card processing has a responsibility to safeguard credit information. Whether you’re taking credit card numbers, account names, dates, etc., maintaining strict adherence to PCI DSS guidelines is a must. 

Now, the specific steps to implementing PCI compliance vary depending on where and how customer data flows your way. 

PCI compliance for merchants

If you’re a merchant or sub-merchant, PCI compliance is all about securing the point of transaction and ensuring proper data storage practices.

Garrek points out, “From a merchant standpoint, PCI compliance revolves around the concept of ‘I’m taking this transaction. Perhaps I’m storing it in a CRM, or (though let’s hope not) we’re storing it on paper somewhere in the office. How are we taking that information?”

In other words, for merchants, PCI compliance mostly takes place at the point of sale or data storage—i.e., the CRM or ISV software.

PCI compliance for ISVs

Now, if you’re an ISV, your PCI compliance measures will be more centered around safeguarding software environments and facilitating the safe transfer of data.

“It’s the same principle from an ISV perspective, except they’re a little further down the chain,” explains Garrek. 

According to him, ISVs would be asking questions like:

  • How will I manage and transfer that data?
  • Is my ecosystem locked? 
  • Are my pipelines solid so that data travels smoothly and security? 
  • Is the data tokenized appropriately?

Ultimately, Garrek says that ISVs must prioritize creating and maintaining a secure software environment that meets all the PCI DSS standards. Doing so ensures data remains protected at every point in the payment processing journey.

How PCI compliance affects business growth

Trust is foundational to any business. This is especially true when you handle financial transactions—be it credit cards, debit, ACH, or any other form of payment.

Your customers trust your business to manage and protect their payment information. When people trust you, they’ll stay with your company, which means you’ll be better positioned to grow.

Conversely, low-trust organizations are less likely to retain customers (let alone acquire new ones). Nothing breaks trust more than a data breach, so ensuring the highest level of data security is not just a regulatory requirement; it’s a critical growth factor.

Research shows that 60% of consumers would avoid doing business with a company if it had experienced a recent data breach. 

This shows just how important data security is. Breaches compromise your reputation and bottom line, but more importantly, they can seriously harm the people you serve. 

What happens in the event of a breach?

Speaking of which, when data breaches occur, fees and liabilities are passed down from processors to acquirers and ultimately to ISVs and merchants. Garrek likens it to “a game of rolling downhill.”

“In the event of the breach, the card brands will levy those fees to the highest level available first. So those are going to come in at the processor level. The processor, assuming that there’s an acquirer involved and they aren’t acting as the acquirer, will roll those fees down to the acquirer.”

He continues, “Assuming that an ISO or an ISV is involved, they’re going to roll those fees to the ISV level. And then that ISV will then have to subrogate that against the merchant.”

And here’s the rub: the average cost of a data breach is about $35,000. The sad part is that when impacted by a breach, about 60% of small businesses have to declare bankruptcy or close their doors.  

As such, it’s critical for businesses to prioritize robust security measures. A big part of that lies in the payment partners you decide to work with. 

What to look for in a payments partner to ensure PCI compliance

Regardless of whether you’re a merchant or ISV, having the right payments partner is critical. When you’re searching for a payments partner or processor, be sure to ask questions like:

  • What kind of coverage exists for ISVs and merchants?
  • Does the provider own a platform allowing ISVs and merchants to become PCI compliant? 
  • Do they have any kind of breach insurance that would apply to merchants or ISVs?

Garrek emphasizes that not all payment processors and platforms are created equal. For instance, some providers might not enforce strict compliance checks like certifications or scans, but this only minimizes their responsibility, not that of the individual merchants.

That’s why it’s critical for ISVs and merchants alike to confirm compliance responsibilities in writing and understand the extent of coverage and support provided by the payments company.

Don’t just look for a provider; look for a payments partner

Garrek’s advice? Set your sights on companies that offer a true partnership. This is particularly true if you’re an ISV. 

Stax Connect, for example, focuses on tightly aligning with ISVs to enhance their business growth through scalable and comprehensive support tools.

“We pursue a partnership where we help an ISV grow, which in turn helps us grow. It’s a true partnership that’s meant to be scalable using in-house solutions, from CRMs to portfolio management to PCI tools. And that partnership is designed to create a very solid book of business that is mature and maturing over the years, with low attrition rates and deep relational ties.”

Final Words

For businesses looking to grow and thrive, nailing data security and PCI compliance is a must. It’s incredibly important to keep up with industry updates, follow best practices, and choose the right partners who prioritize security as much as you do.

We hope you found this webinar recap useful! Be sure to catch the full discussion on demand here

Request Quote


ISVs vs SaaS: What’s the Difference?

Independent Software Vendors (ISVs) and Software-as-a-Service Providers (SaaS) operate within the same market, thus creating a push-and-pull revenue dynamic. In this article, you’ll learn the differences between these providers and gain valuable insights for positioning your offerings successfully.


  • ISVs develop and distribute software products independently and often collaborate with hardware manufacturers and platform providers. SaaS companies deliver software applications over the internet on a subscription basis, simplifying access and management for users.
  • While they operate under different business models, ISVs and SaaS share similarities in software development, cross-platform accessibility, and industry reach.
  • ISVs and SaaS providers differ in software distribution, licensing models, hosting responsibilities, support options, upgrade and maintenance procedures, and scalability.
Learn More

What are ISVs?

ISVs, or Independent Software Vendors, are businesses that develop and distribute software products to end-users. They operate independently of hardware manufacturers or platform providers, but collaborations with these entities are feasible. 

ISV software products are tailored to meet the specific needs of industries and users. Some well-known examples are Adobe, a design and creator platform, Autodesk, a leading construction management system; and Meditech, a healthcare information systems solution.

What are SaaS companies?

SaaS, or Software as a Service, companies host and deliver software applications over the internet on a subscription basis. Users can log in to the platform using their preferred web browser without purchasing and installing any application. 

Examples of popular SaaS apps include Shopify, an eCommerce platform, Dropbox, a cloud storage service, and Stax Bill, an automated payment processing system.

ISVs vs SaaS: An Overview

Technically speaking SaaS companies are also ISVs because they develop software. As such, all SaaS companies are ISVs (since they create software), BUT not all ISVs are SaaS companies, due to the differences in how they offer their software to end users.

This distinction highlights the different business models in the software industry. How companies price and distribute their solutions affects everything from revenue streams and customer interaction to product development and delivery methods. 

So whether you’re a software provider or a user (or both) understanding these differences is crucial because it helps you decide on which solution best fits your needs.

ISVs (Independent Software Vendors) SaaS (Software as a Service) Companies
Definition Businesses that develop and distribute software products to end-users. They operate independently but can collaborate with hardware manufacturers or platform providers. Companies that host and deliver software applications over the internet on a subscription basis, allowing users to log in and use the platform via a web browser without installing any application.
Software Distribution Through direct selling, hardware bundling, third-party resellers/distributors, and OEM partnerships. Primarily through direct-to-user subscriptions and third-party distributors.
Deployment & Hosting Deploy software on-premises requiring compatibility with different operating systems. Some may use cloud platforms for online solutions. SaaS solutions handle software deployment and management on the user’s behalf, utilizing cloud computing infrastructure for easier deployment.
Customer Support In-house support teams maintain direct relationships with end-users for assistance. Support through an in-house or outsourced central system, often leveraging robust support infrastructures like self-service portals, chatbots, and knowledge bases.
Business Model Generates revenue through various licensing models, catering to a wide range of industries and sectors with software that often requires on-premises deployment or specific platform compatibility. Relies on a subscription model with easy web access, making software available across any internet-connected device. Emphasizes user-friendliness and ease of access and management.


A Closer Look at ISVs

The ISV business model revolves around designing, coding, testing, and refining applications. This iterative process enables them to meet the constant demand for new and improved software solutions across industries and sectors. 

ISVs generate revenue through software licensing via subscription or one-time purchase. As an example, Intuit software operates on a subscription-based model, which users pay for on a monthly or annual basis. While Autodesk allows subscriptions and one-time purchases for permanent software access. 

To simplify the procurement process, ISVs target enterprises looking for ISV partners. These could include platform providers, hardware manufacturers, technology partners, channel partners, and system integrators. 

Consider Stax’s partner program. ISVs that integrate their solutions with Stax Connect gain access to the platform’s global reach, co-selling opportunities, and support. Furthermore, this ecosystem of partners allows Stax to expand into software solutions, cloud services, and artificial intelligence.

ISV solutions are more cost-effective than developing custom software in-house or purchasing off-the-shelf solutions. Yet, challenges arise when integrating them with existing systems due to compatibility, data migration, and interoperability issues.

Understanding SaaS Companies and How They Operate

SaaS solutions offer online accessibility without requiring users to install or manage software on their devices. It reduces the time and resources for setup and maintenance, improving users’ efficiency, productivity, and data management capabilities.

SaaS providers use Application Programming Interfaces (APIs) to establish connections between their software and other applications. For example, Stax APIs and mobile development kits enable secure in-person, online, ACH, and mobile payments on any platform.

Such integrations enhance the overall customer experience. Users can access a wide range of tools within the familiar SaaS settings. This unsurprisingly has driven the SaaS industry to a 232 billion US dollar growth. 

However, SaaS companies need to optimize their products and adapt to evolving technologies to survive. This entails maintaining smooth integration with existing systems, which can be challenging due to differences in architectures and data formats. They must also implement robust encryption and address vendor lock-in to uphold their solution’s flexibility and security. 

4 Similarities Between ISVs and SaaS

While they operate under different business models, ISVs and SaaS share similarities in software development, cross-platform accessibility, and industry reach.

Software development

ISVs and SaaS providers focus on creating scalable and user-friendly applications. They often adopt a modular architecture to segment their applications into smaller, independent components. Components can be added, modified, or replaced without affecting the entire system.

Additionally, many SaaS providers and ISVs take advantage of open-source tools (such as Red Hat) frameworks, and libraries. Doing so accelerates development cycles while reducing software licensing and development costs. 

Cross-platform accessibility

Both models offer flexible solutions for multiple platforms to ensure a consistent user experience. In this way, users can transition between devices without disruptions in functionality or interface familiarity.

For ISVs, this means developing applications that can run on various platforms such as Windows, macOS, Apple, or Android. Some use cloud-based solutions to deliver online solutions (e.g., Microsoft Azure, Amazon Web Services (AWS), or Salesforce AppExchange).

For SaaS companies, it means developing platform-agnostic, web-based applications. Users can access these platforms with any desktop computer, laptop, tablet, or smartphone browser, resulting in uninterrupted productivity.

Use cases and industry reach

ISVs and SaaS providers develop solutions for multi-industry use cases, including but not limited to:

  • Customer relationship management (CRM)
  • Enterprise resource planning (ERP)
  • Accounting and financial management
  • Industry-specific solutions (e.g., healthcare, retail, and manufacturing)
  • Collaboration and productivity tools
  • Data analytics and business intelligence
  • Cybersecurity solutions
  • eCommerce platforms.

Both may also incorporate compliance standards in their products. The more tailored the software to the unique needs and workflows of particular industries, the better the organizational efficiency.

Compliance standards

ISV and SaaS companies must adhere to compliance standards and regulations to operate ethically and responsibly. They can work with compliance experts or third-party consultants to achieve this.

Compliance standards include GDPR for data protection, HIPAA for healthcare data privacy, PCI DSS for payment card security, and ISO 27001 for information security management. By following these, they can build trust with customers and mitigate legal and financial risks.

Now that we’ve covered the common ground between ISVs and SaaS providers, let’s analyze what sets them apart.

Key Differences Between ISVs and SaaS

Gain insights into the differences between ISVs and SaaS providers to elevate your software’s market position.

Software distribution

ISVs reach their target audience and make their software accessible to end-users through:

  • Direct selling through the company’s website and other online marketplaces
  • Hardware bundling with platform providers
  • Third-party resellers or distributors
  • OEM partnerships with hardware manufacturers

SaaS companies, on the other hand, rely mostly on direct-to-user subscriptions and third-party distributors. 

ISVs can strengthen these partnerships by optimizing their online presence and adding value to end users. For SaaS, finding underserved or emerging niche markets and customizing offerings is key to expanding their customer base.

Licensing and revenue models

ISVs generate revenue through upfront payments or recurring maintenance contracts. SaaS licensing, on the other hand, follows a subscription-based pricing model. Customers only pay based on the number of users, the volume of data processed, or other usage metrics each period.

ISVs can offer flexible licensing options, such as subscription-based models or pay-per-use pricing, to position themselves better. For SaaS, offering tiered pricing with varying features and functionalities to cater to different segments can help differentiate their subscription plans.

Deployment and hosting responsibilities

ISVs deploy software on-premises and require compatibility with different operating systems, such as Windows and Linux. Some ISVs may leverage cloud platforms to host online solutions. Meanwhile, SaaS solutions handle software deployment and management on the user’s behalf. 

SaaS solution’s cloud computing infrastructure offers easier deployment. Providers can further enhance it with user-friendly onboarding experiences, including webinars, templates, or pre-built configurations. In response, ISVs may consider offering hybrid solutions that combine on-premises deployment with cloud-based hosting. 

Customer relationship and support models

In the ISV model, in-house support teams maintain direct relationships with end-users for assistance. SaaS providers deliver support through an in-house or outsourced central system.

Customer-centric support allows ISVs to gather firsthand feedback that can help improve their products and services. SaaS companies can invest in robust support infrastructure (e.g., self-service portals, chatbots, and knowledge bases) to resolve issues efficiently.

Upgrades and maintenance

ISV customers are responsible for upgrading and maintaining the software, including installing patches, updates, and new versions. In contrast, SaaS providers handle upgrades and maintenance for all users.

Hands-off maintenance is a strong selling point for SaaS to showcase their commitment to providing a hassle-free experience. ISVs can outperform this by offering value-added services like free training and consulting to help users manage upgrades. 

Scalability and integration capabilities

ISV solutions may require additional infrastructure investments to support scalability. They’re deployed on-premises or in private data centers, so the capacity and resources are fixed. They require manual upgrades to handle increased demand.

SaaS platforms can accommodate changes in user demand without requiring significant adjustments, making them ideal for startups. These cloud providers also operate across multiple data centers and regions. Thus, they can fail over to alternate locations in the event of hardware failures or disruptions in one data center.

Elevate Your Software Company with Integrated Payments

Understanding the similarities and distinctions between ISVs and SaaS can help you make informed decisions about strategy.

As the software ecosystem continues to evolve, users demand all-in-one solutions. Innovate and provide tailored solutions that meet these needs, including flexible payment processing. Here’s how Stax Connect can help.

FAQs about ISVs

Q: What are ISVs?

ISVs, or Independent Software Vendors, are companies that specialize in making and selling software, which is designed to run on one or more computer hardware or operating system platforms. ISVs are a crucial part of the software industry, providing a wide range of software solutions and applications to customers across various industries. These solutions can range from specialized software for specific business operations to consumer applications for broader markets.

Q: What’s the difference between ISVs and SaaS companies?

The main difference between ISVs and SaaS (Software as a Service) companies lies in the way they deliver their software products to customers. For ISVs, software can be distributed in various forms, such as physical media, on-premise solutions, or cloud-based, depending on the product and customer preference.  On the other hand, SaaS companies deliver their software over the internet as a service. This means that instead of purchasing software to install, or running it on their own hardware, customers access the software via the web or API, usually for a recurring subscription fee.

Q: What is an ISV example?

Some popular examples of ISVs are Adobe, Autodesk, and Meditech.

Q: Is a SaaS company an ISV?

Yes, a SaaS company can be considered an ISV because it develops and sells software. However, the defining characteristic of a SaaS company is its delivery model. While traditional ISVs might offer physical or downloadable software products, SaaS companies provide their software exclusively over the internet on a subscription basis.

In other words, while all SaaS companies are ISVs (since they develop software), not all ISVs are SaaS companies, due to the differences in how they offer their software to end users.


Top ISV Companies that Integrate Payments [2024 List]

Companies and software providers that embed payment solutions into their services and platform are likely to attract and retain more customers. By using a cloud-based integrated payment software solution, you can provide a streamlined user experience while also earning an additional revenue stream through monetization. 

To access these functionalities, most companies work with an independent software vendor (ISV) partner, which essentially is a software company or app that works with another ISV company to drive their digital transformation and revenue sales, improve scalability, and enhance business processes.

When it comes to payments,partnering with an ISV like Stax Connect is a great way for companies to go to market with their own payment platform. But with different enterprise software solutions available, it can be hard finding the best ISV company to embed payments with. 

If you can relate to that, no need to worry—we’ll break it all down to set you up for success.


  • An ISV payments partner, when properly integrated, can reduce billing errors, empower companies to take data-driven decisions, and enhance overall efficiency. 
  • It’s important to carefully go through criteria like transparency, PCI compliance, and payment monetization when selecting an ISV payments partner.
  • There are numerous ISV companies that integrate payments. From software geared towards field services to medical and patient management platforms, these ISVs recognize the value of  embedding payment processing capabilities directly into their applications.
Learn More

7 ISV Companies that Integrate Payments

One of the best ways to understand integrated payments in the context of ISVs is actually to see these software companies in action. To that end, let’s look at some notable ISV companies that integrate payments into their solutions. 


Shelterluv is a web-based rescue management software that enables animal shelters and community service providers to streamline operations and improve the welfare of animals under their care. The software’s key features include digital adoption applications, reporting capabilities, and custom forms for things like vaccines and treatments. 

Shelterluv also has a built-in payment solution—ShelterPay—that allows shelters to collect funds and donations easily. The company uses Stax Connect’s white-labeled API to power its payment features, ensuring that transactions are secure, compliant, and optimized for the unique needs of animal welfare organizations.

“We found what we were looking for with Stax,” says Elena Battles, Director of Customer Experience.” “Shelterluv provides the deep understanding and support of our customers; Stax provides the payments expertise. We’re grateful for the chance to make the work of our shelter and rescue customers a little easier every day—Stax plays a critical part in that seamless process.”


A solution built for service providers in the home and garden industry, HindSite allows lawn and irrigation specialists to manage their schedules, tasks, and client relationships. The software offers features that enhance service delivery, including time and material tracking, estimating, automated text and email messages, and more. 

HindSite also enables its users to process payments on the platform through FieldCentral Payments. This feature lets service providers securely store credit cards and send payment links to clients, so getting paid is a breeze. 

HindSite teamed up with Stax Connect to implement FieldCentral Payments, and the partnership enabled the company to provide more value to its users. 

Before launching integrated payments, HindSite users had to use a third-party payments provider, which meant juggling multiple solutions and spending time reconciling data. Thanks to integrated payments, the entire process is now simplified, enhancing the experience of both merchants and their clients. 

As HindSite user Michael Rose, owner of Suburban Lawn Sprinkler, puts it, “The ability to accept payments through my HindSite platform has been an absolute game-changer. HindSite and Stax are constantly adding features and functionality to improve my experience.”

Yard Bill

Yard Bill is a billing software platform geared specifically for gardeners. The software comes with built-in invoicing features that allow clients to pay online with a credit card or PayPal. 

The software enables gardeners to manage their finances more effectively and ensure that they’re paid for their work. Yard Bill lets gardeners offer subscriptions, view detailed payment histories, and create customizable web pages. Yard Bill also provides visibility into invoice activity and can notify users when invoices are viewed and paid. 


ChiroSpring is an all-in-one practice management software made for—you guessed it—chiropractors. With features like online intake forms, scheduling tools, and patient reminders, chiropractors can focus more on patient care rather than getting bogged down by admin.

As for payments, ChiroSpring has two key features to ensure chiropractors get paid. First is patient billing, which leverages ChiroSpring’s integrated clearinghouse to manage claims and ensure timely reimbursement from insurance providers. 

There’s also ChiroSpring Pay, an integrated payments solution (powered by Stax Connect) that allows chiropractors to accept card payments as well as create scheduled and recurring payments. ChiroSpring Pay is secure and HIPAA-compliant, which means all transactions are conducted with the highest level of security and privacy. That way, both the practice and the patients’ sensitive information are protected.

Because the payment solution is fully integrated into the software, merchants don’t have to worry about using separate systems for clinical management and financial transactions.


Sera is field service software built for HVAC, plumbing, and electrical professionals. The solution makes life easier for these pro service providers through features like scheduling and dispatch automation, live job time tracking, and dynamic pricing. 

Sera wanted to be an all-in-one solution for service providers, so the company sought out an integrated payments partner that could seamlessly handle transactions while offering excellent support capabilities.

Enter Stax Connect, which provides a comprehensive payment solution tailored specifically to the needs of field service professionals.

What made Stax Connect stand out from other providers was our focus on providing superior customer support and onboarding experience. According to Chris Meseke, Head of Product at Sera, Stax Connect went the extra mile in terms of service and support.

“Stax took ownership and played middleman to a contractor and us. They put together a program plan and a project plan and everything, which was way above and beyond. To come to the table with that was pretty unique,” he says.

Since partnering with Stax, Sera has launched Sera Payments, and has seen a reduction in merchant approval time, larger processing volume per merchant, and faster issue resolution.


Shopify’s integrated payment service offers transparent fees, flexible checkout options, and streamlined online store payments. It’s a popular ISV for eCommerce sites and the default for all Shopify stores, which means there is no need to set up a third-party provider to process payments. With no cancellation fees or pre-set contract lengths, Shopify provides its users with transparency and freedom to use its all-in-one eCommerce solution as they see fit.

They’re also mostly transparent with their pricing, offering interchange plus pricing that starts at 2.5% + 30¢ USD. Note that this can go up to 2.59 + 30¢ USD, depending on your Shopify plan and other factors. 

And if you’re looking for more specific solutions like omnichannel selling, you’d have to shell out around $90 extra per location. It’s also not the best option for clients that don’t need website hosting since you’ll be required to sign up and pay for that to access Shopify Payments. If you host your website with Shopify, this could be an intelligent solution, but for companies that have their website set up elsewhere and are looking primarily for payment hardware, Stax might be the better ISV partner.


SimplePractice is a web-based electronic health record (EHR) solution for various types of medical practices, including mental health clinics, social workers, and therapists.

SimplePractice digitizes several processes around patient scheduling, document management, insurance claims, and more. The platform also has Telehealth capabilities so medical professionals can connect with their patients remotely.

Regarding payments, SimplePractice offers HIPAA-compliant payment processing with built-in features like AutoPay, billing document creation, billing estimates, and more. 

Criteria for Selecting the Best ISV Company

On paper, finding the right SaaS billing software sounds like a piece of cake: you want a provider that processes payments and manages the entire transaction lifecycle. In reality, it can be a bit trickier. So what should you look for?

Consider the following.

  • Pricing and transparency. You want a provider that’s transparent: not just about pricing, but also with customer service (is it easy to get help when needed?) and onboarding (can it be customized to your unique business?).
  • Payment integrations. They should take an innovative approach to payment solutions, offering a range of integrations and automations to improve your workflow. That way, they’re not disrupting your way of working, but complementing it. 
  • Data and reporting.See if they offer built-in payment analytics and data insights, and preferably provide a way to monetize payments as well!
  • Security and fraud prevention. Make sure your payments are 100% protected with a company that doesn’t just meet, but goes beyond PCI compliance, like via data tokenization.

By taking these steps—and verifying everything your potential provider says independently on review sites—you can rest easy knowing you made the right decision.

Wrapping Up

Integrating payments into your current offering with the right ISV partner can enhance your platform or application, all while providing real value to your customers. 

Through the power of payments-led growth, our Stax Connect API helps ISVs go to market with their own branded payment platform. Use our payments expertise to unlock revenue potential and take your platform to the next level, all with Stax Connect. 

Contact us today to learn more.

Request Quote

FAQs about ISV companies

Q: What is an ISV and how does it help with payment integration? 

An Independent Software Vendor (ISV) is a company or app that partners with other businesses to drive their digital transformation, particularly in integrating payment solutions. ISVs like Stax Connect can help reduce billing errors, empower data-driven decisions, and enhance overall business efficiency by providing streamlined payment integration platforms.

Q: What should I look for when choosing an ISV for payment integration? 

Pay attention to factors like pricing transparency, payment integration options, data and reporting capabilities, and security measures. You want a provider that offers a wide range of payment integration options to fit your specific business needs.

Q: How do I ensure the ISV I choose is the best fit for my business? 

To ensure the best fit, evaluate the ISV based on your specific business needs, such as the scale of your operations, your industry’s specific requirements, and the geographic regions you serve. Also, independently verify the ISV’s claims through reviews on trusted sites and consider their customer service and technical support capabilities.

Q: What steps should I take to start integrating an ISV payment solution? 

The integration process will vary from one provider to the next. Contact the ISV to discuss customization options for your unique business model, and ensure you understand their pricing structure, security standards, and support services. Be sure to follow the ISV’s onboarding process to integrate their payment solutions into your platform or service.

The Benefits of SaaS and Implementing SaaS Payments

Research shows that the global software-as-a-service (SaaS) industry was valued at $248.76 billion in 2023 and is projected to cross $250 billion this year. What’s more, this value is expected to reach $325 billion by the year 2028. 

As such, the advantages of SaaS offerings can’t be easily overlooked. SaaS business applications are web-based, which means that they are hosted on cloud infrastructure. It’s an alternative to traditional software distribution and on-premise software installation—companies don’t need to build and maintain servers or data centers.

Instead, SaaS applications are hosted on cloud computing networks and users can access their functionality on-demand through the internet. All you need is a fast internet connection, a web browser, and your login credentials to access your cloud-based software. 

The SaaS model isn’t just for the tech industry—cloud services are widespread in industries such as healthcare, retail, eCommerce, and education. SaaS services are also used in customer relationship management (CRM), human resources management, analytics, and communication.

In this article, we’ll explore the many benefits of SaaS and how to implement SaaS payments.


  • The benefits of SaaS offerings can’t be easily overlooked. SaaS applications are hosted on cloud computing networks and users can access their functionality on-demand through the internet resulting in significant cost savings, scalability, flexibility, security, and convenience.
  • Because of their many benefits, businesses have realized the need for implementing SaaS payments as well. However, small businesses must carefully choose the right payment gateway, research the solution’s integration capabilities, and ensure it supports automating billing and invoicing including recurring payments. 
  • Businesses looking for embedded cloud-based payment solutions need to verify the data protection methods used by SaaS payment providers (e.g. tokenization, encryption). They must also check the kind of expertise and support the company offers before implementing a solution.
Learn More

The Benefits of SaaS 

The SaaS industry has seen tremendous growth over the last two decades—all because of the benefits these solutions offer. Let’s take a look at some of them.

Cost savings

With most SaaS products, there are no upfront costs to buy or install the applications in a local environment which makes them very cost-effective. No hardware or IT infrastructure costs are involved either as you can access the applications over the internet. What’s more, users don’t need to bear the cost of maintaining or updating the software. It’s hosted on the cloud and software providers are responsible for software development, maintenance, and releasing updates. 

SaaS companies use subscription-based pricing models so customers are aware of how much they have to pay month-on-month. Generally, pay-as-you-go pricing options are available so you pay only when you use the software. So companies end up saving even more money as they don’t have to worry about software licensing fees. 

Scalability and flexibility

One of the main reasons why SaaS is so popular is that it can be accessed from anywhere as long as you have a working internet connection. That’s why demand for the SaaS delivery model exploded during the pandemic as it allowed employees to work remotely with minimal disruptions to their normal workflows.

SaaS offers businesses a lot of flexibility as they can quickly change their plan if their business needs or usage changes. Downgrades and upgrades can be applied in a few clicks from a single computer. 

Automatic updates and maintenance

SaaS software is maintained by the service provider that developed and is hosting the software on a cloud. So users don’t need to worry about updating the software. Updates are pushed to the cloud automatically and regularly by the SaaS provider.

SaaS companies are responsible for maintaining their applications and notifying their clients. This reduces the chances of malware attacks, bugs, and redundancies. It must also be noted that these updates or new features are usually free unlike with traditional software. 

Enhanced collaboration and accessibility

SaaS solutions offer 24/7 accessibility on any device for remote employees, facilitating global collaboration. For example, a CRM solution (e.g. Salesforce) allows customer support teams to utilize distribution lists for constant monitoring.

SaaS tools for document sharing, video/audio calls, and task management enhance collaboration and efficiency. They foster a global workforce, widening the talent pool, and promoting seamless communication and collaboration across diverse locations and time zones.

Security and compliance

SaaS providers put a lot of effort into protecting their applications as well as business data. With regular updates and patches, bugs are fixed and the applications are protected against the latest malware. This also ensures that SaaS products are compliant with the latest data security guidelines

Implementing SaaS Payments

Because of their many benefits, businesses have realized the need for implementing SaaS payments as well. However, small businesses must keep in mind a few things before jumping into it.

Choosing the right payment gateway

When a customer makes a payment, the payment gateway captures the customer’s information, validates it, and then transfers the amount to the business account. So when choosing a payment gateway, you should check if the software is easy-to-use and is PCI compliant.

Businesses should also be aware of the various fees charged by payment gateways. Take the time to review fee structures and research the fees that can and cannot be negotiated.

Integration with SaaS platforms

SaaS payment solutions are built to be easy to plug in with other software applications. However, before integrating SaaS payments with other platforms, it’s best to understand the hardware and software requirements and versions of both. If customizations are required, SaaS vendors are usually more than willing to help. 

SaaS payment platforms often integrate with accounting software, allowing seamless record-keeping and financial management. This automation enhances the user experience, increases efficiency, and reduces the risk of errors, ultimately contributing to improved cash flow and business operations. 

Managing subscriptions and recurring payments

One of the greatest benefits of SaaS payments is automatic billing and invoicing. Users enjoy the convenience of recurring payments and automated invoicing, reducing manual tasks and ensuring timely payments.

Make sure to implement workflows to handle failed payments and cancellations. Refunds should also be processed quickly to prevent customers from getting frustrated. 

Challenges and Considerations

Customer and payment data are extremely sensitive and private and need to be protected. Hence, businesses looking for embedded cloud-based payment solutions need to verify the data protection methods used by SaaS payment providers. Tokenization must be used along with encryption to protect all transactions.

You also need to consider providing 24/7 customer support to help customers with any payment issues. Your payments provider can also help in offering expertise and support to your customers.  

Case Studies

Benefits Of Saas For Field Service Management Software

Sera is a Field Service Management (FSM) software company based in Texas. Their software offers features such as scheduling, real-time customer booking, and easy quote generation for field service professionals. This allows professionals to focus only on providing the best service to their clients while Sera takes care of all the administrative tasks. 

The company was looking to help their field professional customers process payments seamlessly. This is where Stax Connect came in. 

And what delighted them was Stax’s extended support that went above and beyond the usual scope. In their own words, “Stax took ownership and played middleman to a contractor and us. They put together a program plan and a project plan and everything, which was way above and beyond; To come to the table with that was pretty unique.”

Final Words

Modern-day customers look for quick, intuitive, and straightforward technology, and SaaS applications are perfectly suited to their demands. Internet connectivity has improved by leaps and bounds and accessing software through the web has become cheaper and more reliable than traditional, local software installation.

As such, SaaS payments are one sector that is estimated to grow significantly in the coming years. However, such software needs to be implemented with the utmost care. Data protection and PCI compliance should be the top priorities of embedded payments providers. To enhance customer satisfaction, workflows for automated retries and settlement of payments, refunds, and cancellations must also be built into the software. 

To learn how you can implement a robust SaaS payment solution using Stax Connect, contact us today.

Learn More

FAQs about the Benefits of SaaS 

Q: What is SaaS and why is it important?

SaaS, or Software as a Service, is a model of software delivery where applications are hosted remotely on the cloud and made available to users over the internet, typically on a subscription basis. This model eliminates the need for organizations to install, maintain, and run applications on their own computers or in their data centers.

Q: What are the benefits of SaaS?

SaaS can significantly lower the costs associated with purchasing, installing, maintaining, and upgrading software. These applications are also available in the cloud, so you can access them anywhere with an Internet connection. Another key benefit? SaaS platforms can be easily scaled to accommodate growing numbers of users or to expand functionality, and they can integrate with existing software ecosystems via APIs.

Q: What are the most common uses of SaaS?

Some of the most common use cases SaaS include: 

  • business applications (CRM, accounting software, etc.)
  • collaboration apps (email, calendaring, and document sharing platforms)
  • productivity software (office software, note-taking apps, and scheduling tools) 
  • Commerce solutions (POS software, ecommerce, etc.)

Q: What are the basic components of SaaS?

The main component of a SaaS solution is the actual software application offered as a service to customers. Beyond that, SaaS software can have additional offerings, including  data storage, API integrations, security features, and more. 

Q: What is the advantage of SaaS over IaaS?

SaaS (Software as a Service) and IaaS (Infrastructure as a Service) are both cloud computing services, but they serve different purposes. SaaS provides end-users with ready-to-use software applications over the internet, while IaaS offers virtualized computing resources over the web. SaaS focuses on software and its use, whereas IaaS focuses on the infrastructure that supports online services. 

6 Vertical SaaS Examples that Integrate Payments

Business owners are increasingly showing an overwhelming preference for SaaS platforms with embedded payment capabilities as part of their offerings. 

Manual payment processing and disconnected software and payment solutions are dying out, and research by Sifted shows that the integrated financial services market will grow to $3.6 trillion by 2030

Only SaaS companies that take the step to offer seamless integrated payment processing on their platforms will retain the loyalty of their customers and gain an advantage over their competitors. Not to mention the benefit of extra revenues from payment processing fees collected on each transaction. 

In this article, we will help you better understand how integrated payments work by exploring six vertical SaaS examples that offer embedded payment solutions as a core part of their offerings. 


  • Vertical SaaS products are custom solutions that help business owners effectively manage challenges and regulatory requirements that are peculiar to their industry.
  • Integrated payments is the combination of payment processing functionality with other business operations management features on the same platform.
  • Forward-thinking companies offer embedded payment capabilities on their SaaS platforms to help meet the needs of their users. 
Request Quote

What is Vertical SaaS?

Vertical SaaS is a software solution designed with features focused on meeting the needs of users in a specific industry niche like fitness, healthcare, real estate, restaurants, or car dealerships.

It is different from horizontal SaaS, which aims to meet the needs of a wide range of industries. Products from brands like Microsoft, Google, and Salesforce are horizontal SaaS tools created for everyone. 

The rationale behind vertical SaaS products is that most industries have peculiar pain points and regulatory requirements that can only be managed using custom solutions. For example, the owner of a restaurant business will require a SaaS platform that supports online ordering, takeouts, delivery services, delivery tracking, and multi-location management—features that are unique to that industry.

What are Integrated Payments?

Integrated payments simply means the seamless combination of payment processing functionality with other business operations management features on a single platform.

For vertical SaaS companies, this means integrating a payment processor into your existing software so your users can process customer transactions on one platform without having to switch to a third-party app to get paid. 

Your embedded payment processing tool must support online invoicing and all the payment types used by customers. These includes:

The role of integrated payments in vertical SaaS

Below are some of the top reasons to consider adding integrated payments to your SaaS platform.

It enhances user experience through seamless transactions

Incorporating payment processing functionality into your platform means your users no longer have to pay for third-party financial software, and that will drastically increase the value of your product to them, leading to higher customer loyalty.

It improves cash flow with faster payment processing

Instead of the traditional time-wasting process of manually reconciling receipts, your platform will automatically organize payment transaction data and even help with compliance-related tasks, all of which will shorten the period your users will receive the funds in their merchant accounts.

Key Industries Benefiting from Vertical SaaS with Integrated Payments


Integrating payment systems into healthcare information management platforms helps clinics and other healthcare companies offer the variety of payment methods that patients want, while complying with industry regulations such as data security requirements set by HIPAA (Health Insurance Portability and Accountability Act).


Retailers must manage sales from both brick-and-mortar outlets and online eCommerce stores. An integrated payments solution makes it easy to manage orders and process all customer transactions on a single platform. 

Real estate

Integrated payments let property managers process rent and management fees for multiple properties. They can also set up recurring fees and give their tenants the flexibility to pay rent using any payment method they prefer, whether cash, electronic wallets, ACH, credit or debit card.


Adding a payment processing solution built for the legal industry to a case management software platform will make it possible for clients to pay bills from anywhere without having to physically visit the law firm. It will also facilitate compliance with ABA guidelines on the management of interests accruing on trust accounts as well as other regulations in the industry. 

Examples of Vertical SaaS with Integrated Payments

Studying the SaaS companies listed below will help you identify the best way to integrate payment processing into your own vertical SaaS platform.

HindSite (field management software)

Hindsite Vertical Saas ExampleHindSite is designed for businesses in the green industry, particularly lawn care and irrigation businesses. It comes with features for scheduling service calls, tracking employees, invoicing customers, and processing payments. The software solution is also used by HVAC, plumbing, pool service, carpet cleaning, and waste service companies.

HindSite offers the FieldCentral Payments tool as its customer-facing all-in-one payment solution. It enables users to email or text payment links to customers once work is completed. They can also collect payments from customers in the field using the mobile app, which supports any payment method customers may want to use.

The secret behind HindSite’s relevant and effective payment solution is Stax Connect, an embedded payment partner that will help you create a fully white-label payment processing portal on your SaaS platform. HindSite worked with Stax payment experts to integrate the Stax Connect API with their platform, and it was able to easily onboard its customers by offering them Stax’s payment enrollment options. The impact on user experience was immediate, and the company could clearly see its customers saving countless hours that would have been spent reconciling revenues when they were working with two different systems. 

Shelterluv (animal welfare)

Shelterluv Vertical Saas Examples

Shelterluv provides animal shelter and welfare organizations with all the tools they need to manage the animal rehoming process. It includes features for accepting donations, organizing medical records, and finding foster parents. The company states that its goal is to get animal care providers from behind the computer so they can spend more time with the animals they are truly passionate about.

Its built-in checkout tool lets users process adoptions in minutes. There are also discounts on pet supplies for adopters and conversion features that have been proven to help convert 30% of animal adopters into donors

Interestingly, Shelterluv was using Stripe as its payment provider before switching to Stax Connect in search of better customer-centric services. Stax experts helped the company migrate its customers from Stripe using tokenization without disturbing the normal operation of the platform. Customers were easily able to make the switch by completing a 5-minute application form, and a process that they thought would take the rest of the year was already 50% completed in two weeks. 

ChiroSpring (healthcare)

Chirospring Vertical Saas Examples

ChiroSpring is a cloud-based chiropractic software platform that provides chiropractic practices of all sizes with everything they need to run their office efficiently. Its features include an online scheduler for patient appointments, SOAP note templates, online intake forms, ERA auto-posting, care plans, and more.

ChiroSpring Pay is its integrated payment solution, and it lets chiropractors send email patient statements with links that customers can use to pay. It supports EMV & NFC payments, Apple Pay, Samsung Pay, Google Wallet, and many other payment options.

Like HindSite and Shelterluv, ChiroSpring’s payment solution is also based on Stax Connect. And given that this is a different industry, it comes with unique features like built-in HIPAA compliance in data security, privacy policy, and form design. 

Buildium (real estate management)

Buildium Vertical Saas Examples

Buildium is a residential property management software that helps property managers and owners manage their rental properties. It includes features for rental listings, lease application management, maintenance request management, rent collection, and income tracking.

Its integrated property management accounting platform comes with a “resident center,” which is a portal where tenants can pay rent and other fees. It also includes a bookkeeping software tool for coordinating rent schedules, tracking rent payments, managing vendor payments, and bank reconciliation. 

Shopify (eCommerce platform for retail)

Shopify Vertical Saas Examples

Shopify is an online store builder that lets retailers create and run an eCommerce business on any online outlet and from any location on the planet. Its suite of tools includes a website builder, a blogging platform, an inventory management tool, a dropping shipping tool, advanced analytics, and much more. 

Shopify Payments is its built-in payment processing solution, and it’s set up automatically as soon as the store goes live. The payments platform supports multiple payment methods and includes features for managing product shipping, refunds, and chargebacks. 

Clio (legal practice management)

Clio Vertical Saas Examples

Clio is a case management software platform designed to help law firms and judicial service providers store and manage case-related information. It also comes with features for managing day-to-day office operations, including CRM, data management, client communications, calendar, and time tracking.

Its billing and invoicing functionality lets lawyers send bills electronically to clients, which will be paid using the attached pay link or QR codes. Law firms can also set up payment plans and automatically send reminder emails to clients alerting them of outstanding bills.

Advantages of Using Vertical SaaS Solutions with Integrated Payments

  • Streamlined Operations: you can use industry-specific templates to set up automated billing and invoicing and receive payments without having to switch to another offsite platform.
  • Enhanced Data Security: vertical SaaS solutions with integrated payments are designed from the ground up to comply with industry-specific data security guidelines. 
  • Improved Customer Satisfaction: you no longer need to redirect customers to an offsite payment processor, which will significantly improve the customer experience. 

Challenges and Considerations 

  • Integrating Existing Systems and Workflows: the payments processing solution may not be compatible with the suite of software apps you currently use to run your business.
  • Costs and Benefits: you may have to invest significant financial resources into hiring developers to help integrate the payment partner’s API with your platform.
  • Scalability: the SaaS platform may have difficulties scaling its offerings to meet the needs of your growing business. 

Start Offering Integrated Payments as a Vertical SaaS Company

Embedded payment solutions are now a must-have for vertical SaaS companies, and once you give your customers the ability to accept payments, you will start to see real user growth and higher revenues.

Stax Connect is a fintech solution that will help you integrate a payment processor into your SaaS platform in as little as 30 days. It also comes with top-notch support staff to help figure out the payment enrollment process and guide you through any risks involved in the process of getting everything up and running. 

Contact us to learn more

FAQs about Vertical SaaS examples

Q: What is vertical SaaS?

Vertical SaaS refers to Software as a Service platforms that are designed to cater specifically to the needs of a particular industry or sector. This targeted approach allows for more tailored features and functionalities that directly address the pain points of businesses within those sectors, such as healthcare, real estate, retail, or legal industries.

Q: How is vertical SaaS different from horizontal SaaS?

Vertical SaaS are solutions designed with features focused on meeting the needs of users in a specific industry niche, such as healthcare, real estate, or retail, among others. On the other hand, horizontal SaaS aims to serve a wide range of industries with a more generalist approach, offering products like those from Microsoft, Google, and Salesforce.

Q: What are vertical SaaS examples?

Some specific vertical SaaS examples include ChiroSpring, which offers chiropractic software with features for patient appointments, SOAP notes, and integrated payments for healthcare services. In real estate, Buildium provides residential property management software, facilitating rent collection, lease management, and property maintenance, all with integrated payment capabilities. Meanwhile, HindSite is field management software catering to the green industry.

Q: How can a SaaS company start offering integrated payments?

SaaS companies can start offering integrated payments by partnering with fintech solutions like Stax Connect, which can help integrate a payment processor into the SaaS platform efficiently. Stax Connect also provides support staff to assist with the payment enrollment process and guide through any risks involved in the setup.

How to Find the Best SaaS Billing Platform: A Complete Guide

Here’s an interesting stat: 70% of businesses consider subscription and membership models indispensable for future commercial growth and expansion. However, only 10% of them currently employ these models.

What hinders the 90% is the high costs of delivering better products and experiences that warrant long-term customer loyalty. In a saturated market, how do they distinguish themselves? How do they keep customers returning for more?

Software-as-a-service (SaaS) businesses need to constantly evolve their offerings to stay fresh and relevant. They must engineer a well-rounded solution that makes handling subscriptions a breeze (and yes, it is as hard as it sounds).

But if you’re a B2B solution, there’s a high likelihood that businesses will be interested in being able to accept customer payments, rather than just sending them a PayPal link or to a generic payment gateway.

By offering a payment solution that’s integrated with the rest of your service, you can streamline this process and offer increased convenience. How do you add payment processing capabilities to your software? By partnering with a trusted SaaS billing platform.

In this guide, we’re going to cover what companies need to consider when choosing a SaaS billing platform—and how Stax Connect makes this process simple.


  • A SaaS billing platform is a digital solution that allows SaaS companies to process payments and manage the overall transaction lifecycle. This includes subscription management, revenue recognition, dunning management, integrations with other business systems, fraud prevention, and more.
  • Automated SaaS billing and subscription management work hand-in-hand to streamline business operations. With proper integration, they can minimize billing errors, enable adaptive pricing strategies, and provide real-time insights to enhance overall efficiency.
  • Some of the features to look for in a SaaS billing platform include subscription billing management, payment analytics, dunning management, and fraud prevention.  For best practices, integrate it with your other systems, offer flexible plans for optimized cash flow, and ensure data security compliance to industry standards. 

Stax Green Icon

Join the Payments-Led Growth Movement

Sign up to keep up-to-date with the latest trends in payments, vertical SaaS, and technology from industry experts.

What is a SaaS Billing Platform?

A SaaS billing platform is a digital solution that allows companies to process payments and manage the overall transaction lifecycle. This includes subscription management, revenue recognition, dunning management, integrations with other business systems, fraud prevention, and more.

SaaS billing solutions are usually talked about within the context of B2C payment processing. But this isn’t sufficient for enterprise-level SaaS companies that want to offer payment processing to their own customers as a value-added service. This is where an advanced B2B subscription management platform comes in.

Learn More

Understanding SaaS Billing and Subscription Management

SaaS billing and subscription management work hand-in-hand to keep digital businesses running smoothly. Billing focuses on financial transactions and payment processes, while the latter oversees a broader range of business operations. This integrated approach addresses modern consumers’ evolving expectations. 

Customers seek personalized and hassle-free experiences. Both systems allow you to craft personalized subscription plans based on user needs and preferences. Whether it’s different billing needs, pricing tiers, varied service levels, or add-on features, the flexibility caters to diverse requirements.

Moreover, a billing-integrated subscription model facilitates transparency and real-time information. It provides instant alerts on subscription plan changes, upcoming payments, and any relevant notifications. Its smart automation keeps customers informed at every step.

These are only a glimpse of what automated SaaS billing software brings to the table for a subscription-based business model. We’ll go over these benefits in more detail in the following part, from boosting customer retention to seamlessly adapting pricing strategy.

Key Benefits of Automated SaaS Billing Systems

Embracing automation with solutions like Stax Bill enables more efficient and accurate subscription management. Key advantages include:

  • Customer retention. By automating subscription renewals, customers don’t inadvertently lapse or face interruptions in service. This convenience reduces the chances of churn and promotes long-term customer retention.
  • Reduced potential errors. Automation eliminates the need for manual data entry and processing. It ensures accurate calculations, invoice generation, and payment processing, so you don’t have to worry about billing discrepancies later.
  • Adaptive pricing strategies. Automated systems let you add premium features, expand service offerings, or set discount pricing for specific periods. The exact process varies depending on the software you use, but Stax Bill features a user-friendly interface for such adjustments.
  • Real-time insights. SaaS billing generates real-time insights through comprehensive analytics and reporting. You can track key metrics in real time, allowing you to make up-to-date, data-driven decisions. It’ll also help you address customer pain points to maximize their revenue potential.

Explore a smarter way to handle your SaaS billing. Stax Bill’s seamless subscription management software automates your payment processes, minimizes errors, and delivers real-time insights. Learn more about our features here.

Why Should SaaS Companies Consider Offering Payment Processing Services As Part Of Their Software?

Not every enterprise-level SaaS company or subscription business considers adding online payment collection into their software solution. This is often due to misconceptions that they will have to develop this functionality from scratch (more on this later). But there are some pretty compelling reasons why it’s worth integrating payment processing into your SaaS platform:

Payments present an additional revenue stream to your business

Although the world of SaaS management tools can be highly lucrative, it’s also unstable. Long-term customer retention is a major challenge, and the high churn rates of this business model can make it difficult for companies to build stable revenue.

For this reason, all the best SaaS startups embrace careful revenue management and look for opportunities to upsell customers and broaden their sources of revenue.

Payment processing can be included within your pricing plans in several different ways. For example, you could include billing software within a certain tier of your SaaS subscription, or offer it as an optional add-on or upgrade that subscribers can access for a fixed monthly rate or usage-based pricing.

Full control over the payment process

Although subscribing to an existing payment processor is convenient, you have very limited control over how the payment process works. There’s little transparency over what fees are charged or how issues such as chargebacks are handled—all of which can hurt the customer experience.

By becoming the payment facilitator, it’s entirely up to your business to decide what payment methods you want to accept or what schedule you use for transferring funds. This means more flexibility in designing a system that works for your customers.

Stand out from competitors by offering increased convenience

As competition grows in the eCommerce space, many companies are looking for additional cloud-based services they can integrate into their technology stack. This allows customers to run more workflows through one system, rather than trying to integrate several systems together.

Integrated payment processing is an especially valuable service because it since neatly alongside a whole host of other professional services, including accounting, CRM, SaaS subscription billing, scheduling, and more.

4 Steps To Find the Right SaaS Payments Partner

Finding the right SaaS billing platform for your needs can be an overwhelming process for businesses to navigate. With so many options on the market, it can be difficult to know what to prioritize in your search. Here are 4 steps to find a payment partner who ticks the right boxes:

Compare pricing models

This might seem obvious, but the pricing model used by different software solutions will vary. Depending on your payment volumes, you may be able to access enterprise-level pricing that is fully customizable to your needs, i.e. whether you plan on processing multiple currencies. Alternatively, they may apply usage-based pricing or a fixed monthly or annual fee. Be sure to check what is included in these fees as certain services, such as a subscription management system, may come as an additional add-on.

Check where a partner is licensed to operate

While many billing systems operate globally, some may be restricted to processing payments made in specific regions or countries. If your company has customers around the world or plans to expand internationally, it’s important to check where a potential billing solution is licensed to operate. Otherwise, you may find yourself needing to switch providers again in the not-too-distant future, which can hamper business growth.

Review API documentation to see how easy it is to integrate

API (Application Programming Interface) is what allows your software to integrate with your billing platform. An open API means that a SaaS provider has made its code available via documentation so your team can offer different features and services, such as recurring billing or invoicing. The strain of this process can vary between payment partners, so it’s important to review any API documentation to understand how long it will take to get key systems set up.

Understand what level of customer support a partner will provide

24/7 customer support is a vital offering for any payment partner when you are responsible for processing payments on behalf of other merchants. If there is an outage, your customers are going to turn to you for an explanation. Being able to speak to a support team across multiple channels, including email, live chat, or phone, is essential to resolve problems in a timely manner. It’s a good idea to also ask what resources a potential partner has to assist with troubleshooting, such as webinars, guides, and video tutorials.

What Features Should You Look For in a Billing Platform?

Ready to explore billing platforms for your SaaS company? Consider the following features. 

1. Customizable onboarding

When offering payment processing services, you want to make it easy as possible for your customers to begin accepting payments. If the process is complex or requires signing up through another app or checkout, this might push subscribers to opt for another solution.

To avoid this, look for a SaaS billing solution that offers fully-customizable onboarding workflows and tracking. This way, you can see how customers are progressing and whether they may need some additional support.

2. Subscription billing management

If you’re wanting to meet the payment needs of SaaS businesses, you must meet the needs of their billing models. In addition to recurring billing, subscription management involves setup fees, automated renewals, Card Not Present transactions, and more. Being able to offer these high-powered features to your customers will allow you to compete more effectively with other B2B payment processing solutions, such as Chargify and Chargebee.

3. Built-in payment analytics

When you’re in charge of processing payments, there are several KPIs you need to keep track of in real-time to identify areas that may require optimization. This means you need a SaaS billing platform capable of tracking a range of important metrics, including:

Monthly Recurring Revenue (MRR). Monthly Recurring Revenue is a measure of what revenue a SaaS company expects to receive every month from offering payment processing as a service. MRR is essential to help you project earnings, as a decline in recurring payments could indicate you’re experiencing an increase in customer churn or downgrades in subscriptions.

Churn Rate. It refers to the percentage of customers who discontinue or stop using a product or service within a given period. A higher churn rate indicates a higher level of customer loss who were actively engaging with the payment features. Meanwhile, a lower churn rate signifies better customer retention.

Attachment Rate. This is what proportion of your total customers have signed up for your payment processing service. This is a useful measure of how many customers are utilizing payments in addition to your other offerings, and how successful your sales and marketing efforts are at attracting new subscribers. If your attachment rate has plateaued, this could be an indication that you need to spotlight payment processing more heavily on your channels.

Payment Processing Velocity. It’s not only important to look at how many businesses are subscribed to payment processing, but how many payments they are accepting on a weekly or monthly basis. Keeping track of velocity enables you to identify which customers are undergoing fast growth, and may benefit from other services in your portfolio.

Understanding SaaS metrics will help you strategically alter your strategies for sustained growth and long-term customer satisfaction.

4. Automated payment collection aka dunning management

Involuntary churn is a huge problem within the SaaS space, making up between 20-40% of overall customer churn. This makes smart automated payment collection (sometimes referred to as dunning management) a key part of any subscription billing software.  

This is the process  of automating the communications and actions taken to remind customers of their outstanding payments and to encourage them to settle their debts within the specified terms.

Credit card retries and notifications to update card details assist SaaS brands in recapturing revenue and preventing subscribers from falling out of the sales funnel. For best results, pick a billing platform that offers SaaS companies customized automated payment collection.

5. Fraud prevention

As the provider of payment processing services, your company faces a lot of liability if customers experience a leak of sensitive data, such as credit card details or personal information. Make sure that your SaaS billing platform is fully compliant with PCI DSS security regulations and can securely store credit card data on file via payment tokenization. This gives both you and your customers confidence that data breaches can be avoided.

Choosing the Right SaaS Billing Software

Your billing platform should tick all the boxes above and be able to scale alongside your business. They must accommodate your expanding customer base, increasing transactions, and growing business needs. 

Here are some top billing software options to consider.

Features Stripe Billing Recurly Stax Bill
Integration Robust API, suitable for businesses with moderate to high technical capabilities Intuitive UI, easy to use, but lacks extensive integration Boasts seamless connectivity with Native Integrations, API, and Webhooks
Subscription Management Unifies payments, billing, and revenue management in one place Handles multiple subscriptions Simplifies tasks from registrations to renewals with a self-service portal
Recurring Billing & Automation Automate payments with prebuilt invoices Automates subscription billing and invoicing Recurring payments support multiple gateways​​ and currencies
Revenue Recognition ASC 606-compliant ASC 606-compliant Automated, ASC 606-compliant
Analytics For accounts receivable aging reports For subscriber growth and retention Real-time subscription and billing data
Dunning Management Has a customizable dunning flow Limited customization options Extensive automated dunning features—e.g., fully customizable emails and SMS, automated failed payment retry schedule, and AR aging report analysis

Choose your provider wisely to ensure your SaaS billing application integrates with your daily operations.

How to Integrate SaaS Billing Software with Your Business Operations

Simplified setup and configuration mean you can start using your software ASAP. Here’s a brief guide to achieving seamless integration.

Accounting and bank reconciliation. Choose a platform that allows integrations with popular accounting software (e.g., QuickBooks, Xero, NetSuite) for enhanced revenue streams. This automatic synchronization eliminates manual data entry, establishes consistent tax rules across platforms, and streamlines bank reconciliation of invoices and payments.

Cash flow optimization. Implement flexible ​​subscription plans like annual prepayments or discounts for upfront payments to improve cash flow predictability.
Pro-tip: With Stax Bill, you can set up automated dunning processes for late payments to minimize delinquencies.

Customer relationship management (CRM). If the platform enables CRM integration, it’ll help you synch customer information like contact details, subscription plans, and usage data real-time. Use these insights to identify upsell and cross-sell opportunities and offer targeted promotions.

Marketing and promotion. Leverage billing data, such as upcoming renewals and usage trends, to trigger targeted marketing campaigns. If feasible, A/B test different pricing models and promotions to identify the most effective strategies.

Data security and privacy. Double check if your billing software adheres to industry-standard security protocols. To add an extra layer of security, implement strong password policies and multifactor authentication for user access. Don’t forget to conduct penetration testing and security audits to detect and address potential weaknesses.

Connecting your billing processes with other business systems offers a unified view and seamless data flow. Implement the best practices outlined above to drive success in your SaaS business. In the case study below, you’ll see out how the right tool combined with best practices can grow your organization.

Case Study: JustLogin Automates Billing for Streamlined Growth

Inefficient manual billing process hampered scalability and flexibility for HR software provider JustLogin. They struggled with manual invoicing, limited pricing options, and a reliance on checks and wire transfers. To enhance efficiency, it partnered with Stax Bill to implement an automated billing solution. 

Stax Bill generated and delivered invoices lightning-fast while facilitating immediate payment options. It also simplified the introduction of customer-specific strategies, including tiered, stairstep, and volume-based pricing. 

With smart and highly tailored automation, JustLogin achieved the following results:

  • 90% reduction in billing time and errors
  • 3x customer growth without additional staff
  • Increased customer satisfaction with faster issue resolution
  • Greater pricing flexibility for competitive advantage
  • Ability to expand into new regions with multi-currency support

Don’t let manual billing hold your SaaS business back. JustLogin achieved remarkable success with Stax Bill, and so can you. Automate yours today, and free up your team to focus on what matters most. 

Stax Connect: The Ultimate Platform to Monetize Payments

At Stax Connect, we understand the complex and varied needs of SaaS companies adding payment processing to their suite of services. Our end-to-end payment ecosystem offers easy integration and a full suite of payment services including recurring billing, ACH processing, hosted payments, data analytics, and more. Our system is 100% PCI DSS compliant, while our in-house risk team monitors all transactions processed via your software platform to mitigate risk. Access our enrollment toolkit to monitor your entire pipeline and track onboarding from start to finish, ensuring a seamless customer experience for your subscribers.

Want to learn more? Get in touch with our SaaS payment experts today!

Request a Quote

FAQs about SaaS billing

Q: What is SaaS billing?

SaaS billing refers to the process of invoicing and collecting payment for Software as a Service (SaaS) products. Unlike traditional software that is purchased with a one-time fee, SaaS products are typically accessed through a subscription model. SaaS billing involves recurring invoices, which can vary based on usage levels, subscription plans, and other factors. It requires a flexible and dynamic approach to handle various pricing models, discounts, add-ons, and adjustments over time.

Q: What are the best practices for SaaS billing?

One of the key things to remember is to be transparent with your SaaS billing practices. Clearly communicate billing terms, pricing models, and any potential extra charges to avoid surprises and build trust with customers. 

It also helps to be flexible.  Offer multiple pricing tiers and payment options to cater to the diverse needs of your customer base. This can include monthly, quarterly, and annual billing cycles, as well as different levels of service. 

Finally, leverage automation. Automated systems streamline billing processes, reduce errors, and ensure timely invoicing and collection.

Q: What is the billing cycle of SaaS companies?

The billing cycle of SaaS companies refers to the frequency with which customers are billed for their subscriptions. Common cycles include monthly and annual, though some SaaS companies may charge on a quarterly or semi-annual basis. 

Q: What is the best SaaS billing solution

When considering the best SaaS billing solution, StaxBill stands out for several reasons.  Designed specifically for subscription businesses, StaxBill offers a comprehensive suite of billing and subscription management features, including automated invoicing, flexible billing cycles,  dunning management, and more. 

What is the SaaS Magic Number and How Do You Calculate It?

“A man who stops advertising to save money is like a man who stops a clock to save time,” – Henry Ford

In 1913, Henry Ford brought the assembly line to the automobile industry, because he knew that prioritizing efficiency in his plants would make him more profitable. And it worked; the Model-T was the most-produced car in the world until 1975.

So, of course when it came to revenue-driving activities, Ford knew that success in marketing—and business—wasn’t about how much your marketing spend is, but how efficiently you spend it. 

One hundred-odd years later, the types of businesses driving the global economy may have changed, but the lesson stays the same: It’s about efficiency.

For modern Software as a Service (SaaS) companies, the automobile is replaced by primarily digital and cloud-based solutions and software. And because of the digital nature of SaaS businesses and their subscription-based business models, the ability to collect data on how the company is performing is easier and faster than ever. 

Enter the SaaS Magic Number, which measures the return on sales and marketing spend in generating new subscription revenue.

This article sheds light on what the SaaS Magic Number is and how to optimize it. 


  • The SaaS Magic Number is a metric, somewhat similar to ROI, but designed to assess the efficiency and effectiveness of a company’s sales and marketing strategies. 
  • By analyzing the SaaS Magic Number, SaaS companies can determine how well their revenue-driving investments (in sales, marketing, and customer retention) are translating into actual revenue growth.
  • A high Magic Number suggests that a company is efficiently converting its investments into revenue, while a low Magic Number may indicate the need for adjustments in sales and marketing approaches.

What is the SaaS Magic Number?

The SaaS Magic Number is a metric, related to ROI, but better designed to assess the efficiency and effectiveness of a company’s sales and marketing strategies. It’s an especially useful metric for SaaS startups, early-stage companies, or companies with shorter sales cycles that have a lot of data, but can adapt and change direction quickly.

It’s a ratio that compares the growth in recurring revenue to the sales and marketing expenses incurred during a specific period. By analyzing this ratio, SaaS companies can determine how well their revenue-driving investments (in sales, marketing, and customer retention) are translating into actual revenue growth.

According to Hubspot, 44% of marketers say that being able to better measure return on investment (ROI) of digital marketing is a priority in the coming year. This is where the SaaS Magic Number becomes particularly handy. 

Why is the SaaS Magic Number important?

The Magic Number is one of many SaaS metrics, such as customer lifetime value (LTV), churn rate, profit and gross margin, annual recurring revenue (ARR), and monthly recurring revenue (MRR), you should be using to evaluate sales and marketing performance. 

However, it stands out for its relationship between spend and growth over time. It’s not just a measure of total return on investment (ROI) or a simple method of monitoring of cash flow, but serves as a sales efficiency metric. It helps businesses understand the effectiveness of their customer acquisition and retention strategies. 

For example: a high Magic Number suggests that a company is efficiently converting its investments into revenue, while a low Magic Number may indicate the need for adjustments in sales and marketing, pricing, or other approaches.

How Do You Calculate the SaaS Magic Number?

The SaaS Magic Number is calculated using three numbers: 

  • Your current quarter’s ARR (annual recurring revenue, or your current quarter’s revenue, multiplied by four)
  • Your previous quarter’s ARR (your previous quarter’s revenue, multiplied by four)
  • Your previous quarter’s total sales and marketing spend (also known as your Customer Acquisition Cost, or CAC)

The SaaS Magic Number formula is as follows:

SaaS Magic Number = (Current Quarter Revenue ARR – Previous Quarter Revenue ARR) / Previous Quarter Sales and Marketing Spend

Or, if you’re unfamiliar with ARR (again, that’s Annual Recurring Revenue), you can calculate it using the following:

SaaS Magic Number = (Current Quarter Revenue 4) – (Previous Quarter Revenue 4) / Previous Quarter Sales and Marketing Spend

To calculate the SaaS Magic Number, simply gather the necessary data, plug the data into the formula, and analyze the result. 

Tips for Calculating the SaaS Magic Number

It’s important to note that while the SaaS Magic Number is commonly calculated quarterly, as in the example above, it can be calculated over any time period, so long as you’re consistent with your data and you properly annualize the result. 

You could, for example, calculate the SaaS Magic Number monthly. You would follow a similar template, but you would just need to make sure that you pull all of your data (the current revenue, the previous revenue, and the previous sales and marketing spend) monthly. It’s also important to note here that to annualize your recurring revenue from monthly data, you should multiply by twelve instead of four.

In other words, to calculate the SaaS Magic Number with monthly data, you’d use the following formula:

SaaS Magic Number  = (Current Month’s Revenue 12) – (Previous Month’s Revenue 12) / Previous Month Sales and Marketing Spend

SaaS Magic Number example calculation with hypothetical data

*Let’s try a hypothetical scenario to illustrate how to calculate the SaaS Magic Number:

  • New Revenue from the Current Quarter Revenue: $1,450,000
  • Last Quarter Revenue: $1,200,000
  • Previous Quarter Sales and Marketing Spend (or CAC): $800,000

Remember, our formula using quarterly numbers is:

SaaS Magic Number = (Current Quarter Revenue 4) – (Previous Quarter Revenue 4) / Previous Quarter Sales and Marketing Spend

So, plugging in our numbers, we see:

SaaS Magic Number = (1,450,000 4) – (1,200,000 4) / 800,000

Following through on our math, that becomes:

SaaS Magic Number = (5,800,000) – (4,800,000) / 800,000

That simplifies down to:

SaaS Magic Number = 1,000,000 / 800,000

SaaS Magic Number = 1.25

In this example, the SaaS Magic Number is 1.25.

What Different Values of the Magic Number Indicate

Magic Number What it Means
< 0 The business is not efficiently converting its investments into revenue, indicating potential issues in the sales and marketing strategies. Focus on lowering marketing costs and optimization before investing more.
0 The revenue growth is in line with the expenditures incurred, but there is no positive leverage. Sales and marketing spend is sustaining revenue, but not driving profit.
0-1 The business is achieving positive leverage, with revenue growth outpacing sales and marketing expenses. Consider investing more money in existing strategies or optimizing to improve marketing efficiency.
> 1 The business is generating significant revenue growth for every dollar invested in sales and marketing, indicating a high level of efficiency.

Now that we have our example SaaS Magic Number calculation, we need to know what that number means. Here’s a breakdown of different SaaS Magic Number benchmarks and what they may indicate:

  • Magic Number < 0: A negative Magic Number suggests that the business is not efficiently converting its investments into revenue, indicating potential issues in the sales and marketing strategies. You’ll want to focus on lowering your marketing costs and instead focusing on optimization here before investing any more sales and marketing dollars into these current strategies.
  • Magic Number = 0: A Magic Number of 0 signifies that the revenue growth is in line with the expenditures incurred, but there is no positive leverage. In this case, sales and marketing spend is sustaining revenue, but not driving profit.
  • Magic Number = 0-1: A Magic Number between 0 and 1 suggests that the business is achieving positive leverage, with revenue growth outpacing sales and marketing expenses. It is possible you would want to invest more money in existing strategies here, or optimize existing strategies to improve marketing efficiency. 
  • Magic Number > 1: A Magic Number greater than 1 indicates a high level of efficiency, where the business is generating significant revenue growth for every dollar invested in sales and marketing. 

In our example, where we have a SaaS Magic Number of 1.25, the metric indicates that our sales and marketing investment is very efficient. That should tell us that we’re on the right track with our strategies. And that we may want to invest more money to scale our current sales and marketing strategies.

Common Mistakes to Avoid for Accurate Calculation

While calculating the SaaS Magic Number, it’s crucial to avoid a few common mistakes that can skew the results:

  • Inconsistent time periods: Ensure that all the time periods for revenue and expenses align. They should all be quarterly if you’re calculating quarterly, monthly if you’re calculating monthly, etc. Mixing and matching time periods will lead to a very skewed result. 
  • Missing relevant expenses: Be sure to account for all sales and marketing expenses to provide a comprehensive view of the investments made.
  • Inaccurate revenue figures: Double-check revenue data to avoid miscalculations that could impact the Magic Number.
  • Failure to consider adjustments: In certain cases, adjustments may be necessary to account for anomalies or exceptional circumstances.

How to Use This Metric for Decision-Making

The SaaS Magic Number serves as a valuable tool for decision-making across various business units. Here are some ways companies can leverage this metric.

Optimizing resource allocation 

Businesses can use the Magic Number to identify areas where additional investments may yield higher returns or where adjustments are needed to enhance efficiency. For example, you could discover that money spent in paid advertisements driving new customers is not as efficient as money spent on content marketing or upselling your existing customer base. In that case, you’ll want to pull money from the former and invest it in the latter. 

Adding efficient revenue streams

This metric can also prod you to expand or diversify your revenue sources. 

Let’s say your SaaS Magic Number is hovering just above zero, and you want to optimize your revenue streams. One thing to consider is integrated payments. SaaS companies that offer payment processing services as part of their platforms open up sources of revenue through processing fees or additional subscription tiers.

Integrated payments also improves user retention in SaaS. When a platform offers seamless payment processing, it reduces friction for the user, making transactions easier and more efficient. The result? Users continue using the platform and companies benefit from a steady revenue stream. 

Pro tip: if you’re looking to offer integrated payments within your software, Stax Connect can help fuel your growth. 

By partnering with Stax Connect, you can combine the monetization power of payments with the control and security of your own infrastructure. Level up your SaaS platform by enabling payments for your users. 

And with custom revenue-share opportunities, you can maximize your profit margins while adding significant value to your customers.

Forecasting and budgeting

The Magic Number aids in creating more accurate revenue forecasts and budget plans by providing insights into the relationship between investments and growth. You’ll be able to use this efficiency metric to help determine where and when to expand your sales team or your marketing team

Strategic planning 

Companies can align their strategic decisions with the Magic Number, ensuring that growth plans are sustainable and in sync with sales and marketing efforts.

How Often Should You Calculate the Magic Number?

The frequency of calculating the Magic Number depends on the specific needs and dynamics of each business. A quarterly assessment is a common practice, and generally allows for timely adjustments and insights into short-term performance trends. That said, some businesses may choose to calculate it monthly or annually, depending on the pace of their operations and the granularity of data required.


In conclusion, the SaaS Magic Number can be a powerful tool for SaaS businesses seeking to optimize sales efficiency and make informed strategic decisions. By implementing the SaaS Magic Number, businesses can drive sustainable growth and navigate the competitive SaaS landscape with confidence. It’s an efficiency metric that even an efficiency legend like Henry Ford would use to assess success.

FAQs about the SaaS Magic Number

Q: What is the SaaS Magic Number?

The SaaS Magic Number is a metric similar to ROI, designed specifically to evaluate the efficiency and effectiveness of a company’s sales and marketing strategies in the SaaS industry. It compares the growth in recurring revenue to the sales and marketing expenses incurred during a specific period, so companies understand how well their investments are translating into actual revenue growth.

Q: Who is it for?

The SaaS Magic Number is a metric that’s particularly useful for SaaS startups, early-stage companies, or companies with shorter sales cycles that have a lot of data and can adapt and change direction quickly.

Q: How do you calculate the SaaS Magic Number?

You calculate the SaaS Magic Number by taking the growth in annual recurring revenue (ARR) from one period to the next, divided by the sales and marketing expenses of the previous period.

So, if you’re calculating your magic number over the last 12 months, the formula would be:

SaaS Magic Number  = (Current Month’s Revenue 12) – (Previous Month’s Revenue 12)/ Previous Month Sales and Marketing Spend

Q: How often should you measure the SaaS Magic Number?

A quarterly assessment is common practice, but some businesses may choose to calculate it monthly or annually, depending on their operational pace and the granularity of data required.

Vertical SaaS vs Horizontal SaaS: 8 Differences and Similarities

Software as a Service (SaaS) has made business software more accessible by offering cloud-based, on-demand access to a range of solutions, from project management and collaboration to sales and marketing. 

Thanks to SaaS solutions, businesses can easily scale their workflows, eliminating the need to install programs locally or pay for expensive licenses.

But not all SaaS products are alike. Some solutions, like Slack or Microsoft, are useful for any kind of business. Other types of SaaS are relevant only to companies in specific industries. The former is called horizontal SaaS, while the latter is known as vertical SaaS.

While their target audience and the breadth of their solutions are the key differences, vertical and horizontal SaaS also share many similarities, in particular cloud-based hosting and subscription business models.

In this blog, we’re going to explore the characteristics of vertical vs horizontal SaaS and what SaaS companies should consider as they carve out a space for themselves in a highly competitive marketplace.


  • Software as a Service (SaaS) provides cloud-based, scalable software solutions accessible via subscription models, eliminating the need for local installations or licenses.
  • Vertical SaaS solutions are tailored for specific industries, addressing niche needs with in-depth customization and compliance with industry standards.
  • Horizontal SaaS refers to general-purpose software solutions that are applicable across industries and attract a diverse user base.

What is Vertical SaaS?

Vertical SaaS solutions are SaaS products designed for use by a specific industry or business vertical. This differs from horizontal SaaS solutions, which target numerous industries with a single product.

Vertical SaaS focuses on solving the specific needs or pain points experienced by industries that are often poorly served by general SaaS providers. Some examples of niches targeted by vertical SaaS providers include healthcare, eCommerce, finance, and education.

To achieve this, vertical SaaS products bring in experts from niche markets to develop industry-specific features, ensure compliance with industry standards or regulations, and integrate with key business platforms that are standard within that industry.

What is Horizontal SaaS?

Horizontal SaaS refers to general-purpose software solutions that apply to multiple industries, rather than providing solutions that are relevant to one specific market.

These platforms provide functionalities that a diverse user base benefits from, such as project management, social media, automated workflows, or customer relationship management (CRM). Because horizontal SaaS companies serve both startups and enterprise businesses, scalability is a key selling point. This commonly takes the form of add-on services or multiple pricing plans that offer flexible features, like additional user seats or more storage space.

By serving common business needs, horizontal SaaS platforms have a very wide target audience. One of the most well-known examples of horizontal SaaS is Salesforce, which offers a broad suite of tools to assist businesses with CRM, email marketing, conversion tracking, and more.

Differences Between Vertical SaaS vs Horizontal SaaS

Now that we’ve got the fundamentals down, let’s take a closer look at the factors that differentiate vertical and horizontal SaaS companies. 

Target market focus

Horizontal and vertical SaaS each target a very different customer base. Where vertical SaaS targets specific industries with purpose-built tools, horizontal SaaS companies develop more generic solutions that are relevant to many different types of businesses.

Customization and functionality

Because vertical SaaS models are industry-specific, they typically offer high levels of customization to meet the needs of industries with complex or technical requirements. This could involve building custom workflows or introducing regular updates to keep pace with regulation changes. Because horizontal SaaS products are based around more generic functions, they tend to offer less customization or charge higher prices for customizable features.

Scaling and integration capabilities

Because vertical SaaS has a small market size and narrow product focus, this makes scalability more straightforward than for horizontal SaaS applications. It’s easier to accommodate entrepreneurs to enterprise within one industry than several. Horizontal SaaS, meanwhile, needs to service a much broader range of business types to keep acquiring customers, which can put a strain on development resources.

Market competition and entry barriers

Vertical SaaS providers are designing solutions for a specific niche. As such, they can face less competition because of the high barrier of entry that comes with developing specialist SaaS products. 

Horizontal SaaS, on the other hand, needs to reckon with the relative ease of developing generic solutions with a wide range of use cases. This creates an intensely competitive landscape with a higher churn rate, but greater customer acquisition opportunities.

Similarities Between Vertical and Horizontal SaaS

Horizontal and vertical SaaS businesses can overlap in certain areas. Consider the following. 

Subscription-based model

Subscription pricing is the most common model used by both horizontal and vertical SaaS providers. Users will pay a recurring monthly or annual fee to access a specific set of services. Usually, providers will offer more than one plan at different price points, depending on the number of features or the amount of customer support included. It should be easy and seamless to upgrade once a business outgrows the functionality of one plan, as this helps SaaS businesses boost customer retention.

Cloud hosting and accessibility

Cloud-based technology allows both vertical and horizontal SaaS platforms to scale seamlessly and offer users access to their applications via the internet, meaning they can use multiple devices and access data on the go. This is a big advantage for distributed teams and companies who have multiple locations of business, as programs don’t need to be locally installed.

Importance of user experience and interface

Regardless of whether your SaaS product is tailored to a specific industry or more general use, easy-to-use platforms and intuitive features are paramount to avoid lengthy user training. Dense or complicated programs cause customer dissatisfaction or even early terminations of subscriptions. In some cases, providers may offer an account manager who is tasked with offering demos or providing tailored support for company users, which helps to streamline the transition into adopting new systems or workflows.

Ongoing updates and maintenance

No SaaS company can stand still for long if it expects to attract and retain users. As customer acquisition costs continue to rise, regular updates, new features, and performance improvements are a must for both vertical and horizontal SaaS companies to stay competitive and relevant to their target audience. A good way of doing this is to run regular engagement surveys to find out what tools or features users would most like to see added to your application.

Vertical SaaS Success Story: Veeva

Valued at $33.4 billion, Veeva is one of the best examples of vertical SaaS and how tailored software solutions are gaining greater market share. Veeva is a cloud-based CRM and content management solution built specifically for the pharma and life sciences industry. Among other functions, it assists companies with liaising with healthcare professionals, tracking sales metrics, data analytics, and process documentation.

What makes Veeva distinct from more general project management solutions is that it’s built to accommodate niche needs like coordinating clinical trials or regulatory compliance, things that more generic cloud-based solutions are not configured for. Some of its biggest clients include Pfizer, Johnson & Johnson, and Merck, who require the seamless scaling made possible by cloud-based technology.

Horizontal SaaS Success Story: HubSpot

HubSpot has probably the greatest name recognition in the SaaS industry, in part because it services such a broad range of different industries. Their inbound marketing tools, which include CRM, email marketing, content creation, and lead generation, are adaptable to virtually any business.

This set of SaaS tools gives HubSpot a simple but powerful value proposition; it’s the engine for your entire inbound marketing strategy. The HubSpot of Startups program offers significant discounts to enterprise-level products if businesses meet certain criteria, which it leverages to share compelling success stories about enabling businesses to scale with confidence.


The company is also very open to user feedback, emphasizing that understanding customer needs is the key to continuously improving its products. HubSpot’s acquisition of chatbot system Motion AI, for example, was a response to growing customer demand for on-demand communication systems.

What’s Next for Vertical and Horizontal SaaS Companies?

The vertical software market has developed much more slowly than horizontal software. This is due to the smaller market size and longer development time needed to create tailored industry solutions. 

Not only that, but many industries are subject to strict local and national regulations, which can be onerous to comply with. For example, accounting software like QuickBooks needs to comply with Generally Accepted Accounting Principles (GAAP) and International Accounting Standards (IAS).

Because horizontal types of SaaS applications are more straightforward to develop and support, the market has undergone rapid expansion over the past decade. However, growing competition, combined with the difficulty of trying to serve so many industries with one product, has caused the growth of horizontal SaaS to stagnate in recent years.

As more industries begin to recognize the value of tailored solutions, vertical SaaS is experiencing significantly higher growth and investment. Features such as pre-built integrations, deep integration, industry compliance, and advanced analytics capabilities that use AI and machine learning are more common in enterprise-level vertical solutions, which gives the market an edge over horizontal solutions.

This being said, established horizontal SaaS companies with good market share are well-placed to accommodate this shift by trying to break into the vertical SaaS market. Augmenting their current platforms with industry-specific tools is faster than developing a vertical product completely from scratch, which may give existing horizontal SaaS providers an edge over vertical SaaS newcomers if they can recruit the industry expertise required.

Final Words

Both vertical and horizontal SaaS offer different challenges and opportunities that software providers need to consider carefully when developing a product. While horizontal SaaS offers a much larger target market, the market is intensely competitive because the barriers to entry are lower. This can make it difficult for providers to stand out and retain customers. Vertical SaaS helps providers to gain a valuable competitive advantage by ‘niching down’, but typically requires much longer development timeframes and has more limited use cases.

To select the right SaaS model, you’ll want to determine which aligns better with your software features, target audience, and brand messaging to stand out in an increasingly saturated marketplace. By considering the characteristics of vertical and horizontal SaaS as presented here, you can make the right decision that means better growth opportunities for your business.

And if you’re planning to offer credit card processing services with your software, be sure to partner with a solid payment facilitator like Stax Connect. With Stax Connect, you can quickly fuel the growth of your platform and enable payments for your users. Plus, our custom revenue-share opportunities allow each partner to monetize transactions instantly, growing enterprise value.

Contact us to learn more about Stax Connect.

FAQs about vertical SaaS vs horizontal SaaS

Q: What is vertical SaaS vs horizontal SaaS?

Vertical SaaS refers to software solutions that are tailored for specific industries or business verticals, focusing on solving the unique needs or pain points experienced by those industries—e.g., healthcare, finance, education. Horizontal SaaS, on the other hand, provides general-purpose software solutions applicable across multiple industries. These platforms offer functionalities like project management, social media management, automated workflows, or customer relationship management (CRM), benefiting a diverse user base. 

Q: What is an example of a horizontal application software?

Salesforce is one example of horizontal SaaS. It offers a broad suite of tools to assist businesses with CRM, email marketing, conversion tracking, and more, making it applicable to various industries.

Q: What is an example of a vertical market software?

Veeva is an often spotlighted vertical SaaS success story. It’s a cloud-based CRM and content management solution built specifically for the pharma and life sciences industry, addressing niche needs like coordinating clinical trials or regulatory compliance.

Q: Is horizontal SaaS better than vertical SaaS?

There’s no one best answer to whether or not horizontal SaaS is better than vertical SaaS software. If you’re choosing between the two, the best route is to determine which aligns better with your  business needs and target customers, then compare solutions from there. 

ISV vs PayFac: The Similarities and Differences Between Independent Software Vendors and Payment Facilitators

The world is increasingly moving towards becoming cashless and there are numbers to prove it. According to the Pew Research Institute, in 2022, a whopping 41% of Americans said they don’t use cash at all for any of their weekly purchases—a significant jump from 29% in 2018. 

FIS Global reports that in Norway, Sweden, and other Scandinavian countries, more than 90% of transactions processed at point-of-sale (POS) in 2023 were cashless. Further, Statista projects that the value of global digital transactions will exceed $11 trillion in 2024. 

The writing on the wall is clear—businesses need to start accepting digital payments and software providers need to start offering payment services one way or another. In this article, we’ll break down two popular terms used in the payment processing industry—ISV and PayFac—and see what they exactly mean.


  • An independent software vendor (ISV) develops and sells software applications independently of hardware manufacturers. ISVs create software platforms for various industries, including business management, healthcare, and finance.
  • There are two main ways that an ISV can become a payment provider—by adopting the ISO model or the PayFac model. In the ISO model, an ISV partners with a third party that handles merchant account setup, payment processing, risk, and compliance. The ISV has little control over the end user’s payment experience or the processing costs.
  • In contrast, an ISV can partner with a PayFac to offer an integrated payment experience to its users. This gives them greater control over the customer experience and an opportunity to generate additional revenue.

What Is an ISV vs PayFac?

The payment processing industry facilitates electronic transactions between merchants and customers, spanning online, mobile, and in-person payments. It involves a complex ecosystem of financial institutions, including acquiring banks, payment processors, and card networks, alongside technology providers and regulatory bodies.

Payment processors handle transaction authorization, settlement, and security, ensuring seamless and secure payment experiences.  

An independent software vendor (ISV) develops and sells software applications independently of hardware manufacturers. ISVs create software platforms for various industries, including business management, healthcare, and finance. They often customize and integrate their applications to meet specific client needs and market demands.

Now, there are two ways that a software service provider can become a payments provider. They can adopt the independent sales organization (ISO model) or the payment facilitator model (PayFac).

In the ISO model, an ISV partners with a third party that handles merchant account setup, payment processing, risk, and compliance. The ISV has little control over the end user’s payment experience or the processing costs.

In contrast, an ISV can partner with a PayFac to offer an integrated payment experience to its users. This gives them greater control over the customer experience and an opportunity to generate additional revenue.

Payfacs simplify payment processing for small businesses by aggregating transactions under their master merchant accounts. SMBs get access to payment processing services without the need for individual merchant accounts. PayFacs also provide a streamlined onboarding experience, manage underwriting, and handle compliance for its sub-merchants. 

Independent Software Vendors (ISVs)

ISVs create software applications tailored to specific industries or business needs, such as point-of-sale (POS) systems, eCommerce platforms, or accounting software. One of the biggest advantages of an ISV is that they often offer customization options to meet the unique requirements of different businesses. 

Their software solutions can even integrate with existing hardware and software architectures of clients, making ISVs a great option for large companies looking for payment processing applications. As ISVs develop and maintain their software, they have complete ownership of their software as well as all related intellectual properties. 

Payment Facilitators (PayFacs)

Software companies that do not want to get into the payment processing business themselves can opt to work with a PayFac. Oftentimes in the ISV vs PayFac debate, the cost of developing, marketing, and maintaining payment processing software can be overwhelming. Also, companies may choose not to become an ISV in the payment processing industry as they do not want to stray too far from their core business. 

In such cases, collaboration with a PayFac offers the best of both worlds—SaaS providers can offer payment processing to their clients without taking on the huge financial and resource burdens of developing a payment processing application. 

PayFacs facilitate credit card transactions between merchants and payment processors. They handle merchant onboarding, including underwriting and meeting regulatory requirements like Know Your Customer (KYC) mandates. Additionally, PayFacs conduct ongoing monitoring of merchants to ensure compliance with Payment Card Industry (PCI) regulations post-onboarding.

Similarities between ISVs and PayFacs

Now that we understand what they mean, let’s take a look at how ISVs and PayFacs are similar.

Allow businesses to achieve the same goals – In the payment processing ecosystem, both ISVs and PayFacs essentially allow businesses to accept digital payments. Both aim to provide seamless, efficient, and user-friendly payment experiences. Moreover, they also allow businesses to not only monitor electronic payments but also obtain helpful data and trends. 

Overlapping customer base – ISVs and PayFacs can have overlapping customers, particularly businesses seeking integrated payment solutions. ISVs offer software with built-in payment processing capabilities, while the PayFac model simplifies payment acceptance for merchants. Both cater to businesses looking for streamlined and efficient payment solutions within their software applications. Both ISVs and PayFacs also often collaborate with other stakeholders in the payment processing ecosystem, such as payment processors, acquirers, and financial institutions.

Regulatory compliance and security standards – ISVs and PayFacs prioritize compliance and security in their respective roles. ISVs ensure software solutions meet standards like PCI DSS (Payment Card Industry Data Security Standard). PayFacs implement strong security measures for payment transactions, complying with regulations to safeguard customer information.

Differences between ISVs and PayFacs

All said and done, there are significant differences between ISVs and PayFacs. Let’s take a look.

Same goals, different methods – Although ISVs and PayFacs both allow businesses to accept electronic payments, they take different paths to achieve the same goal. ISVs focus on the development and customization of payment processing software. PayFacs focus more on reducing the administrative burden of accepting payments by handling all the paperwork as well as the payment processing. 

ISVs develop payment processing SaaS or APIs that merchants can buy and implement in their own companies. Once the software has been integrated into the merchant’s existing software ecosystem, they can accept various payment methods seamlessly. On the other hand, PayFacs offer payment processing solutions to sub-merchants by aggregating transactions under their own merchant accounts and simplifying onboarding processes. 

Business model and revenue streams – ISVs generate revenue through software sales, licensing fees, and subscription models. PayFacs earn money by charging merchants processing fees per transaction, often a percentage of the transaction value. Additionally, Payfacs earn from setup fees or monthly fees for access to their payment processing services.

Underwriting and merchant accounts – ISVs don’t handle underwriting or merchant accounts and focus only on software development. PayFacs, however, underwrite merchants, vetting their eligibility for payment processing, and aggregating transactions under their master merchant accounts, simplifying the process for businesses to accept card payments.

Case Studies

Successful ISVs include Salesforce and Shopify, offering robust software solutions with payment processing being one of their core functions. Salesforce’s CRM is ubiquitous and as of 2023, it has a 23.8% market share in the CRM software industry. Shopify dominates eCommerce as it allows customers to create their own eCommerce websites. It has user-friendly platforms and extensive customization options for online stores.  

PayFacs like Square and Stripe have revolutionized payment processing, providing easy-to-use platforms for businesses to accept payments online and in-person, disrupting traditional payment methods. 

The ISVs mentioned provide comprehensive solutions tailored to specific business needs, while the PayFacs prioritize simplifying payment processing through user-friendly platforms, reasonable pricing, and efficient merchant services.

Final Words

Before choosing to offer ISV or PayFac type of model to your customers, you need to assess your business’ technical capabilities, resources, client base, and capital at hand. Payment technologies are evolving rapidly so both ISVs and PayFacs have a huge potential for growth in the future. 

However, as an ISV looking to facilitate payments for its users, you can drastically reduce your costs as well as your time-to-market by partnering with a PayFac like Stax Connect. Easily monetize payments while leaving the heavy lifting of onboarding, risk management, and compliance to us. Contact us today for a consultation and learn how we can help.

ISV vs PayFac FAQs

Q: What is the difference between PayFac and ISOs?

PayFacs act as intermediaries between merchants and payment processors or banks. They are registered with major card brands to onboard merchants under their master merchant account, simplifying the merchant account application process. 

Meanwhile, ISOs are third-party agents or companies that partner with banks or payment processors to sell merchant accounts. Unlike PayFacs, ISOs do not onboard merchants under a master merchant account but instead facilitate the setup of individual merchant accounts with banks or processors.

Q: What is the difference between ISV vs PayFac?

ISV (Independent Software Vendors) develop and sell software applications, which can range from retail management systems to healthcare record systems. PayFacs, on the other hand, are entities that have taken on the role of facilitating payments for merchants.

Q: What is the difference between PayFac and payment aggregator?

Payment aggregators are companies that allow multiple merchants to accept payments under a single merchant account. They aggregate the payments processed for these merchants, simplifying the onboarding process and reducing administrative overhead. PayFacs also enable businesses to accept payments under a master merchant account, but they typically offer a more comprehensive suite of services, including merchant onboarding, risk management, and settlement services. 

Q: Is a PayFac a payment processor?

Yes, in a broad sense, a PayFac can be considered a type of payment processor because it processes payments on behalf of its merchants. However, it’s more accurate to describe a PayFac as a facilitator or intermediary that provides access to payment processing through its master merchant account, rather than being a processor in the traditional sense.