So you’ve built a beautiful software product. You’re proud. Your codebase is clean (ish). Your merchants are happy. Then one day, a smooth-talking payments rep slides into your DMs with seductive whispers of “monetizing payments.” Before you know it, you’re pricing interchange rates over lunch and talking residuals like you just discovered free money.
But slow down, Casanova. You’re about to enter a long-term relationship—one with operational, financial, and compliance baggage. And unlike a Vegas wedding, you can’t just get an annulment when you wake up next to a processor you barely know.
What you need is a prenup for payments. Not just to protect yourself, but to make sure you know what you’re committing to. Because in the ISV-payments love story, a bad partner won’t just ghost you—they’ll saddle you with scope creep, compliance nightmares, and irate merchants.
Let’s break down the biggest mistakes ISVs make when chasing payments revenue without a strategy—and how you can avoid ending up in couple’s therapy with your provider.
If your first question is “What’s your buy rate?”—you’re already down the wrong path.
There’s a massive difference between flat-rate pricing and interchange-plus (pass-through) pricing, and you need to know how each impacts your ability to earn, control margins, and remain transparent with your merchants. Flat-rate might look simple, but it often hides embedded fees, spread, and “gotchas” that kill profitability.
Ask:
If you don’t know exactly how pricing works and how your slice gets carved out, you’re not monetizing payments—you’re getting table scraps.
We get it. That API demo felt like a warm bath. Clean docs, embedded widgets, instant provisioning. Your devs were in love by lunch.
But most “developer-friendly” payment platforms come at a steep premium—not just in cost, but in flexibility. Many of them mask a lack of control and feature depth with beautifully wrapped SDKs. They’re easy now, but when you want to add new terminal flows, automate reconciliation, or build out alternate funding paths, suddenly that “pretty” API starts looking like a prison.
There are richer, more powerful platforms out there—often with better economics and broader capabilities—but they may take more initial effort to integrate.
Don’t pick the solution with the prettiest portal. Pick the one that will still support you after your product matures.
Too many ISVs assume that because they’ve accepted payments before, they understand how acquiring works. Spoiler: they don’t.
Being a merchant is not the same as being in the payments flow. When you become part of the acquiring value chain, you need to understand risk monitoring, settlement timelines, chargeback liability, sponsor bank relationships, compliance requirements—and how to keep your dev team from drowning in them.
Domain expertise isn’t a luxury. It’s a prerequisite. If you don’t have it in-house, hire or partner with someone who does before the blind spots burn your roadmap to the ground.
Monetizing payments sounds sexy—until the support queue starts filling up.
Many ISVs don’t realize that payments revenue often comes bundled with support responsibilities. So before you sign the dotted line, ask:
If the answer is “the ISV,” congratulations—you just became a pseudo-processor help desk.
If you don’t want your product team bogged down in troubleshooting payments, you need a partner who offers white-glove merchant support, with SLAs, training, and ticket triage. Otherwise, all those residuals you’re chasing will come at the cost of product velocity and customer goodwill.
Too many ISVs assume PCI is “handled by the payments provider.” Until they get an email from a QSA asking why their architecture allows full PAN data to hit their backend logs.
Your decisions now—semi-integration, tokenization, hosted vs. embedded fields—will define the scope and cost of your PCI burden for years. The difference between SAQ-A and SAQ-D isn’t just form length—it’s tens of thousands of dollars and months of engineering time.
And if you don’t have a partner that walks you through how to minimize your PCI footprint, guess what? You’re holding the compliance bag, and it’s leaking.
Hardware is where dreams go to die. If you pick the wrong path—certified vs. semi-integrated, P2PE vs. non-encrypted—you could be stuck with:
But here’s the killer: key injection.
Most processors inject proprietary keys into terminals. That means if you decide to move providers later, those devices are bricked—or at best, need to be re-keyed at your expense. That’s not just inconvenient, that’s a hardware hostage situation.
Plan your injection strategy. Understand who owns the keys. Don’t let someone else’s crypto lock up your roadmap.
A lot of ISVs walk into a payments partnership thinking, “These are my merchants.” But if the contract is between your provider and the merchant—guess what? They’re not yours anymore.
If the provider locks them into a three-year agreement with painful exit fees, and you later want to change platforms, your merchants aren’t going anywhere. You’re stuck—or worse, forced to rebuild your base from scratch.
And when card brand fees change or new compliance rules roll in, do you get a seat at the table? Or does your “partner” just pass on the cost without discussion?
Ownership equals leverage. Ask who controls pricing, who signs the contract, and how merchant data flows. Otherwise, you’re not building a payments business—you’re just a reseller with no leverage.
We’ve saved the most painful for last. Compliance is not a feature. It’s not a setting in the dashboard. It’s not a “we’ll deal with that later” issue.
If your payments partner doesn’t have a risk and compliance expert (no, not the sales guy who once heard of FinCEN), you are flying blind.
We’ve seen ISVs build out incredible payments features—automated payouts, sub-merchant routing, even card-on-file billing logic—only to be told a year later:
And guess what? That cool feature you spent 6 months building? It’s toast.
Map out your flows early—with a real compliance expert. Diagram how money moves, how data flows, who owns what, and where risk lives. This isn’t optional—it’s existential.
The best partners help you scale, reduce risk, protect margins, and keep your roadmap intact.
The worst ones sell you a dream, lock you into inflexible contracts, and call back a year later saying “you can’t do that.”
By the time you realize your mistake, you’ve got hundreds of merchants and no way out without massive pain.
At Payments Therapist, we don’t sell dreams—we architect reality. We guide ISVs through every decision: pricing models, compliance reviews, hardware architecture, monetization strategies, risk mapping, and more.
Let’s make sure you don’t end up divorced with 200 merchants in custody and a payment stack you can’t scale.
Book a consult. Before you sign the dotted line.