April 28, 2022
payfac vs isv
Hey, what’s up. Everybody is Justin here with B2B vault, the payment technology podcast with your host, Allen Kopelman. We’ll be providing educational information about business payments, FinTech, financial technology, decentralized finance, and the technology businesses need in today’s world. In today’s episode, we’ll be going over how to supercharge your software or ISV company. Here you go; I’m out, Allen, take it over, but welcome everybody to the podcast. So in today’s episode, we’re going to be talking about how to supercharge your software ISV company has been a scorching topic. I’ve met with quite a few companies over the last few months, and we have developed a program that can help take these companies to the next level. So, if you’re a software company or an ISV company, this is the podcast you should be listening to. So you can find out how we can help your company develop a new revenue stream For those who don’t know it for the listeners. What does an ISV do? What does that? Oh, so ISV is an independent software vendor. Okay. So, we’ll get into what types of software vendors we’re talking about.
So independent software vendors, SAAS companies, software as a service where you might have a software as a service that you sell to companies. And then those companies using your SAAS software need also to accept payments. So this can work for those types of companies, or let’s say you sell inventory software or, you know, software to insurance companies, different things like that. And then those, those, and those companies need to accept payments. This can be integrated into your system to enable them to accept payments, and you are creating a new revenue stream. Then software developers who develop software, maybe for individual customers, can get into our program because they can learn how to integrate payments into their software when they’re developing software. Also, a new business has popped up in the last few years. It’s expanding, which is marketplaces. So marketplace, you know, people are familiar with things like E-bay, that’s a marketplace. Amazon is a marketplace, those are big ones, but now there are a lot of smaller marketplaces that have popped up on Etsy, which is now gotten to be very large. And then, you know, other smaller companies are getting into this, this marketplace kind of a website, so it’s like a community selling, and then the payments need to be split up.
So you need a sophisticated payment system, which we can help you with because we already have it built out, right? So you don’t have to build it from scratch. So we have our program. We call it the hybrid pay FAC program because if you want it to become a pay FAC, you have to go through registration, hire employees, need underwriters, risk managers, customer service, people, etc. So with the hybrid payback program, we qualify companies to see if you should be a pay FAC or a hybrid pay FAC. If you’re not going to close in on a billion dollars a year in payments, G and a pay FAC or being an ISO is not feasible because you’ll have many fees. You’re going to end up with, you know, a big barrier to entry because you’re going to have all these salaries, and then it’s going to take you a year or so to get up and running. You’ll be paying these enormous salaries out to get your company set up during that time. So using the hybrid program gives you a lower barrier to entry. So there’s no cap, no big capital outlay. Sure. You got to do some programming. So you need minimal staff compared to you’re leveraging our programs. We’re supplying the risk managers, underwriters, customers, our risk, the backend, all of that is already there. So you don’t have to go in and create all of that.
So you need a minimal amount of staff to run this. Plus, the biggest thing we hear when we talk to the software companies, their biggest two problems that they tell me about are onboarding a customer and getting them approved. Then getting them to go live well, you know, so a lot of these companies, they run, they’d go run to like Stripe or pay pal to help them do that. But there are other options out there, and you can get money, which you’re not getting from those companies because they’re not, they don’t pay notoriously, do not pay anybody anything. So this way, you’re taking your company and bringing in a new revenue stream. Plus, you’re getting these great advantages. So you have auto-enrollment. So customers come to the website, and they buy your software. Then they code, they go to hit the sign up button, and then they’re approved within 15 minutes. And then if they don’t need any equipment, they can start processing quickly within, you know, within a few minutes after that, they can be processing. They’ll be live on the system because you’re using one fully contained system. What would that look like? Is Shopify an example? Shopify, they’re a pay FAC too.
So you make your website. Once it goes live, and you go link up your payments, you’re ready to, you know, you’re ready to start accepting payments, you know, that’s an example of a payback. But the thing is, is that you want, you want your company to, you know, companies like I’ll give an example. So we spoke to one company, and they’re in the retail industry. So they were telling me that I had a problem. They got to negotiate the pricing with the merchants; you set the pricing right with our program. There’s only one price, the same way everybody else does. Negotiate with them unless they surpass a certain level, then okay. Then you can give them a special price. Right. So you’re not doing a lot of price negotiating. So, and then also, because it’s one contained system. So the gateway, boarding, processing, and backend are all on one platform. So you don’t have to do a lot. You don’t have to do a lot. And with automated boarding, you can move quickly and scale. Plus, we can do mass boarding. So let’s say you already have a thousand customers, and you wanted to switch over from Stripe over to this. No problem.
payment and referral services
You can mass board all your clients, Like an import. Yeah. And mass board, everybody they’ll get approved. And then boom, there’ll be turned on. They can switch over from one system to the other. No. Is there an example you could get, like, I’m kind of, I don’t know, lost, I guess, like trying to understand an example of an ISV company? That’s doing this as an ISV company. So like rent cafe. Okay. They’re a big payback. Okay. So what they’re doing is, is they’re getting What is rent Cafe? Oh, rent cafe is a company that links up apartment complexes with rent payments. Okay. So, So they, Okay. All right. So, let’s say, Justin, you owned an apartment complex. I want a hundred apartments, and I Want you to pay my rent Online. Do you want them to pay rent online and all that? You go to rent cafe, we get set up with them, and they enable the whole, that their system enables that. And then rent cafe, you know, they already have a vendor, but if you had a similar type of software and you could link into our system, then you would be able to accept credit cards, debit cards, ACH, crypto, crypto, wallets, everything, the payments.
It’s running in the background and trying to Rent a cafe as the head of the horse. Right. You know, they’re the head of the thing. It’s their software. They’re making a revenue stream from all these payments processed by the thousands of apartment complexes on rent cafes. Right? No, I get it. Yeah. It’s a huge company. Rent cafe had another name a few years ago. I’m not going to remember the name, but the company before they made payments. And then, after they made payments, the company rent cafe is valued in the billions. Now I believe because now not only are they not only, not only are they advertising apartments, right. And they have like a platform fee, but now they’re processing all these payments, and they’re processing billions of dollars of payments, right? That’s an example of somebody who was able to scale up, and with our program, if you were able to scale up to this billion payments, we can help you become a pay FAC and take over everything. And you’re just using the software at that point, you know? So you can make the jump, you know if you can scale, but there’s a lot of companies, you know, and what can make a successful company.
You can be a small ISV and have 500 to a thousand clients. Okay. That doesn’t sound like a lot, and that’s not a lot. And that’s not going to get you close to a billion dollars, right. A year, but you can make some nice income from that, that you’re not making. Also, your company will be valued at five to 10 times more than it’s valued as just a software company because they’re not capturing part of the payments. Once you have the payment piece, you know, they’re, your customer, will be more locked into you, and you’re giving them value-added service because you’re able to bundle all your pricing together. Do you know? And that’s one of the things when we do consult with companies that do this. We talk to them, you know how to, you know, you’re, you need to come up with the value-added menu of stuff that the per you know, the value-added menu of, of features that your customers are going to get. And remember, there’s only going to be one phone number to call when they have a problem, they have a problem. They can call you as a, your company.
You can see everything, gateway, and payments without calling up authorized.net or NMI to see what’s happening. You process payments that first data with nationwide payments systems, we’ve got to call those guys, boom. Everything is self-contained in one, in one place. So you have a very smooth-running operation to service your customers. You know, you can easily service your customers because you handle the software, gateway, and payments. And what kind of clients can we help? We can help people. We’ve talked to companies making restaurant point of sale, software, retail, software, hotel God doing hotel software. And we said to them, they only have, they only have a few dozen hotels. And we’re like, now’s the time to start?
You know, now’s the time to start. Cause one of the biggest problems they told us about and the restaurant people as it takes them about two weeks to get somebody up and running or longer because they got to get a boarded. You know, they got to get the merchant account approved. So because they don’t have instant approval, they got to get the equipment deployed. And then they got, then they got to get the customer installed, right. And get them live on the, on a gateway. So there’s, there’s a lot of pieces, right. With, with us. It’s just one piece. So you’re having service done by one company automotive software. So let’s say you’re making software for the automotive industry. In the insurance industry, marketplaces are huge. I’ve seen all types of marketplaces popping up everywhere, like different types of marketplaces for RV rental, similar to Airbnb, other Airbnb related companies, and things like that. And they need that.
independent sales organizations
They need the ability to make the split payments so that the payment comes in. But now the, at, at some point in time, payment needs to go out to the homeowner, or let’s say you’re renting the RV, and the payment needs to go out to the owner of the RV, or let’s say it’s a marketplace and you’re selling goods. And Justin, as a store Allen as a store, let’s say Rocky selling dog treats. And so then we know the marketplace is processing the transactions, and then the payments need to get paid for. And then the person running the marketplace, it’s taken, you know, a percentage out of each sale. Got it. So, you know, this is a prevalent kind of a business. And what kind of features do we have inside of them, of the software, the features? This is a small list I’m going to give, so people can send bills and invoices out and get paid with payment links. You’re able to, you know, process credit cards, debit cards, wallets, run credits, refunds, and voids.
You know, we have an account updater. If you’re doing recurring transactions, which is very important to have an account updater, somebody changes their credit card. It gets updated automatically through auto-enrollment. This is probably one of the stronger features that everybody likes auto-enrollment and auto-enrollment. It’s the same as going to Shopify square PayPal; boom, you’re Stripe. You’re enrolled in existing a few minutes, and you have auto-enrollment. We offer ACH so people can pay by check. You guys have hosted payment pages, all kinds of plugins for websites, you get all the major wallets, apple, Google, you know, those wallets IVR, which is payments coming through the phone line. So people can go through call a phone number and make a payment. This is popular with different companies, insurance, utilities, and things like that, where they want to make a payment.
Email links and hosted payment pages are probably the dynamic split fundings. We’re talking about half you have a marketplace, or you have, you know, even like, like Uber, right, is an example of a marketplace. Because people are paying to draw, go on Uber. Then Uber collects the money. And then part of that money goes to fees. And then the other part goes to the drivers, right? So we can do all those kinds of things with the dynamic split funding. A lot of pay FAC companies don’t offer that. So we work with several different software vendors that offer this kind of software. Based on what you’re doing in your business, you know, what kind of business it is and what features you need, we put you with the right software vendor who can do that. So if you don’t need dynamic split funding, then there are other options. But dynamic split funding is very popular right now, B2B payments. So business payments, level two, level three, pinless debit.
That’s another huge thing, depending on the size of the transactions, being able to do that, you know, we’re going to be adding cryptocurrency into this. You can white label the solution. So it looks like your solution. When people say, you’re a SAS company, right. You’d want it to be white-labeled, right? So the same thing, like you’re doing payouts, you want it a white label. So it’s all white-labeled, you know, and the mass onboarding is for when you want to switch people over from one system to another. Sounds very cool. Real quick. Sorry. Real quick. I want to shout out our sponsors, NPS bank, NPS Printer, the payment advisory board, and nationwide payment systems. Thank you. Without you guys, this wouldn’t be possible. And if you’re interested in sponsoring the podcast, go to B2B vault.info. There’s a form for you to fill out there and gets B to B vault and Spotify, iTunes, YouTube, Google, iHeart, stitch, or Pandora.
The list goes on and on. Follow us there, subscribe to the channels, and make sure you get updated on all the upcoming episodes. You can go to B2B vault.info, and you can check out some of the past episodes that we have there. Follow us on Instagram, Facebook, Twitter, and tic-tac at B2B vault. And yeah. So back to you, Allen. All right. Thank you, Justin. You’re welcome, sir. Yup. So back to how to supercharge your software ISV company. So what kind of benefits does this have for the company? One increases your profits. You’re adding a potent revenue tool to your tool belt of what you’re doing. Be able to change your offering around and put more value-added services because of all the different things we can do. Those are now all different things you can do. So, you know, you can now, you know, you want to make your software more value, added things like, oh, you want to use the outside credit card processor? Well, that costs you $500 a year to get that set up or that, you know, people on a value-added thing because you’re not going to have to deal with a lot of phone calling to do service. So maybe you reduce the service fees a little bit, things like that.
You can bundle your service offering into one price instead of being piecemealed out like it is now, right? Because they’re getting a gateway, they’re getting the reporting. You know, they’re getting all the value-added services. So, when your customer has an issue, they’re calling up one phone number, you know, or they’re logging into your backend, and they’re able to see everything. They’re not just seeing what your software has. You’re able to link in the backend so they can see their payments back there. 10. Right. So onboarding is very, very, very big. I’ll keep talking about that with approvals and 15 minutes, same as square Stripe, et cetera. This is a major feature to scale quickly and get your customers onboarded very, very quickly reporting. And the biggest thing is no risk. So you don’t even have to take risks because if you’re a full ISO or a full payback, you’re then assuming the risk for fraud, chargebacks, etc.
Yeah. But with our program, it’s no risk because we’re handling all the heavy lifting, we’re handling the whole, you know, the whole thing, you know? So, and also, you know, here’s the thing when you sell your company, or you’re looking for investors, you know, you’re going to be able to show this growth that you’re having through adding payments into your software. So when you sell your company, you’re not just selling a software company anymore. You’re selling a supercharged software company with residual income from payments, making your company more valuable. The perfect example was renting cafes more than probably ten times more than it was. We have over 20 years of experience in the payment processing industry. We have relationships with multiple companies and banks to help move your company forward in a brief period.
Doing an integration to our program is very similar to integrating into Stripe or pay pal. So it’s, you know, restful API, which most developers are familiar with. And so you’re able to, you’re able to integrate into the system and get up and running quickly. That average person is getting up and running in about 30 days. Something a little more complicated can take a couple more weeks. But you know, if you have developers working on this, it is not a big, huge project. If you are integrating a lot of third parties, like let’s say you were doing an ISO right now, you got to integrate your payment application from the bank. Then you’ve got to integrate to the gateway, and you got to integrate the backend processing. And that’s three things with us. You’re integrating just one system. So we’re giving you one system to integrate. The barrier to entry to this used to be; if you weren’t doing a billion dollars of payments, you couldn’t do this kind of thing.
And I can tell you in the next five years; I predict that most software companies will be moving in this direction. Some of them are moving in this direction today. And I think that some of them are becoming like sales agents so they can sell the merchant services. But I think they need to go one step further and have the automated boarding feature to differentiate their company from the rest of the companies. Right. You know, and this helps you move, move at a quicker pace. And you know, so you don’t have to spend a lot of money to hire many employees. You know, this is where our programs come in. You’re not going to have to hire a bunch of employees. You’re not going to have to do, do three different integrations. You know, you’re going to do, you’re going to do, one hooking up to one system. And then you’re making everything run smoothly and creating that extra income. So are you ready to supercharge your business, get your software company and take it to the next level? Set up an appointment for a discovery call. We’ll talk about your, your company.
We’ll learn about your processes. We’ll learn about what you’re trying to do and your goals. Then we can set you up with some meetings with our software team, and we’ll find you the right partner so that you can supercharge your company. Thank you for listening to the B2B Vault. Remember, we’re available on all the podcast networks, the DSPs, as Justin calls them. Follow us on social media at B2B Vault. So there’s a form on the bottom of the page, book an appointment with Alan and book an appointment with me; we’ll call you up and set up a time. We can do a phone call or do a video meeting, and we can explain to you in more detail how everything works, but this is a great program. I hope everybody enjoys their day. Go to B2Bvault.info and Carpe diem, seize the day.
payfac vs isv
payment and referral services
independent sales organizations
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