How ISVs can evolve their payments strategy for the new consumer experience

By Steven Velasquez, Senior Vice President and Head of Partner Business Development

As generative AI and the increased adoption of instant payments become more prevalent in our day-to-day lives, the impact of truly connected payments is upending the traditional consumer experience. The implications for our industry are far-reaching – your merchants can receive funds instantly to help manage their business operations, review data analytics to create personalized marketing campaigns, and receive customer payments faster than ever. In fact, Grand View Research* estimates that the global real-time payments market value was USD $17.57 billion in 2022 and will grow at a compound annual growth rate (CAGR) of 35.5% from 2023 to 2030.

Delivering payments that meet consumer demand

But how is this happening? We’ve seen the rapid adoption of real-time payments with the continued use of popular account-to-account (A2A) transfer services* and the anticipated launch of the Payments Canada’s Real-Time Rail.* Services like these speed up the pace of transactions across the country and provide alternatives to small businesses who wish to avoid bank interchange fees where possible. Further, Canadians have eagerly adopted mobile wallets* through popular providers like Apple and Google, expanding opportunities for businesses to deliver contactless and cash-free experiences for their customers.

Embedding value for your customers

These large players and payments infrastructure investments are just the beginning – downstream software and payments providers need to stake their place in this new ecosystem, to provide the best experiences for their merchant clients and grow their own bottom line. Real-time payments combined with embedded finance and banking-as-a-service (BaaS) are advantageous for both ISVs and their merchant clients. ISVs gain additional revenue streams with products like same-day funding and point-of-sale lending – while adhering to stringent and constantly evolving data security requirements that financial institutions apply to their banking solutions.

Meanwhile, merchants can offer more robust payment options to their end customers and can boost sales and ticket sizes as a result. Thus, ISVs stand to maximize their profitability, increase valuation and differentiate themselves from their competition while embracing new payments innovations and enhancing consumer shopping experiences.

What comes next for embedded finance?

This convergence of technology and function could evolve into the first “super app”* for the North American market. Popular in other markets, specifically in China with WeChat’s market dominance, we’ve yet to see a clear leader as Amazon, Block, and Twitter all make inroads toward not just an integrated payments solution, but a daily lifestyle solution with in-app payments. The financial services industry is laying groundwork today to make this not just a concept, but a reality. Software companies and ISOs are noticing – and for good reason. As we see the rise of instant funding and payment solutions, “everything-as-a-service” and embedded finance capabilities, creating the framework for your own business is critical to competing in the future. Selecting the right payments partner empowers that success. Are you ready?

U.S. Bank | Elavon – where stability and innovation meet

An uncertain economic climate and recent challenges in the financial services sector have many merchants and consumers taking a closer look at who they do business with to evaluate their partnerships and optimize their business strategy. Backed by the strength and stability of U.S. Bank, our innovative payments solutions – including some of the fastest funding in the industry and strategic partnerships to enable real-time payments – mean staying on the forefront of the payments evolution.

Learn why more than 350 ISOs, 1,700 financial Institutions and 1,000 integrated partners trust us with their business. If you’re looking to maximize your revenue potential, accelerate your speed to market, and scale your business for sustainable growth, we’re here to help.