- Dec 03, 2019
Integrated checkouts are the future for software
Developers are thinking differently about payments, according to our latest research report Lost in Transaction: A new relationship for ISVs and payments.
For this research we spoke to 200 independent software vendors (ISVs) based in North America and the UK developing solutions across a range of business verticals, here are the key takeaways from the report.
Market conditions are getting tougher
Software developers are desperate to differentiate themselves from the competition, because the markets they are operating within are more competitive than ever. 34% of software providers believe that they are operating in an overcrowded market, and a further 54% of ISVs describe their market as very competitive. Only 12% believe that the market they operate in is underserved by suppliers.
Pressure on prices (identified by 41% of ISVs) and the influx of new competitors in the market (identified by 39%) are two of the most significant challenges ISVs expect to face in the next year.
Software developers also have significant concerns when it comes to scaling their businesses. The cost of scaling is the issue that worries the greatest percentage of ISVs (45%), followed by regional competition (40%) and a lack of expertise on their own teams (40%).
Developers are turning to payments to enhance their software
In the context of these wider business challenges, the ability to offer best-in-class integrated payments as a feature of a software solution appears key to futureproofing and scaling; 88% of businesses confirmed that upgrading their payment integrations was a priority.
Despite only 28% of ISVs considering it to be industry standard to offer integrated payments in their solution, 100% said that offering integrated payments was an important facet of their product offering. Of those, 70% said that it was very important or critical that they were able to offer integrated payments as an element of their solution.
Which includes demanding more integrated payment methods
Developers are adamant that offering more payment methods within their integrated checkout is one the most critical issues they need to overcome in the next 12 months. On average, ISVs currently offer four payment methods in their integrated checkout, but have ambitions to expand this to nine within a year.
And 80% stated that the range of payment options an integrated payments provider could offer was a very important consideration when selecting a partner. 35% described this as crucial; more than any other differentiating factor.
But a lack of internal resources are holding them back
For 71% of developers, internal issues are a significant hurdle when integrating payments; 46% say that they don’t have adequate internal resources, 35% say it takes too long to integrate the product, and 13% say they have no access to a development centre or community.
When asked about how important this factor is when selecting between payments providers, 77% of software developers said that the effort required to integrate the solution on their part would be a very important differentiator, and 28% confirmed that this is a crucial consideration. 6% identified this factor as the single most important consideration for them.
Specific vertical knowledge is becoming essential
In addition to not offering all the options that they are looking for (42%), developers are frustrated that they are not being offered integrated payment solutions that are specialised to their specific needs. Over a third (35%) say that suppliers’ inflexibility and inability to offer anything other than a one-size-fits-all solution is a challenge that they have experienced when searching for a payments partner; and 23% state that they have had difficulty finding payments providers that understand their sector.
When asked directly about the determining criteria for selecting an integrated payments partner, 68% of ISVs identify specialisation in their sector as a very important factor; 23% say this is critical.