ISV & VAR

Also called Independent Software Vendor, Value Added Reseller, ISV, VAR, integrated software vendor

ISVs build the software your business runs on. VARs resell and install other people's hardware and software. Both increasingly sell you payments.

What it is

An Independent Software Vendor builds software — restaurant POS, salon booking, field service dispatch, dental practice management — and increasingly monetizes payments inside it. A Value Added Reseller sells, configures, installs and supports someone else's hardware and software, historically the local company that put a terminal on your counter and trained your staff. The distinction used to be clean and is now blurring, because the ISV has learned that payments are more profitable than software. Rainforest's 2026 benchmarking study of hundreds of vertical SaaS platforms found 78% target at least 71% payment adoption but only 25% achieve it, and that having a C-suite payments leader is worth 45 basis points of median take rate. Translation: every vertical software company you use is being coached to make you use their payments. For a merchant, this is the single biggest structural change in how payments get sold. Electronic Payments' 2026 trend analysis puts it plainly: merchants "choose their business software first and take the payments that come with it." Toast, Jobber, ServiceTitan, Vagaro, Boulevard and Housecall Pro are all ISVs with payments attached. The VAR, meanwhile, is what a good local ISO increasingly has to be — the implementation and service layer for several platforms rather than the reseller of one.

Why it matters to your business

Your software vendor is now your payments vendor whether you noticed or not, and their payments pricing was set to fund software development, not to compete on rate. That's not necessarily bad — but it means the rate was never bid. The practical opportunity: most vertical software lets you run a second, card-present channel outside the app. A field services company on Jobber paying 2.9% + $0.30 online can often run truck and counter volume through a properly priced card-present account and keep the software for scheduling. You don't have to choose all-or-nothing, and the vendors would rather you didn't know that.

Where it gets contested

The honest critique of the ISV-payments model is that bundling hides price. When payments are a feature of software you already depend on, comparison shopping requires unbundling a thing the vendor deliberately bundled. Jobber, for example, charges 2.9% + $0.30 for online card and 1.0% for ACH — on a $12,000 HVAC install, that's a real number that a field-services business often absorbs without ever comparing it to a card-present alternative for the truck. The stronger version of the critique is switching cost. Once payments, scheduling, customer records and reporting live in one system, changing processors means changing software, and changing software means retraining staff and migrating data. That is not an accident; it is the business model. Shopify's penalty structure is the cleanest published example — an additional transaction fee of 2% on Basic, 1% on Grow, 0.6% on Advanced and 0.2% on Plus for using a third-party gateway. The counterargument deserves weight. Integrated payments genuinely eliminate reconciliation errors, tip handling mistakes and double entry, and attrition data suggests merchants stay: software-attached merchant accounts churn at roughly 5–8% annually versus 15–25% for standalone terminals. Merchants aren't only being trapped; many are being served.

How to check it yourself

Open your software vendor's pricing page and find their published payment rates. Then separate your volume into what genuinely must run inside the app versus what could run card-present or via ACH. Price that second bucket independently. If the software vendor's rate isn't published at all, that itself is the finding.

Receipts

Claims above that are checkable, with where to check them. Published so you do not have to take anyone's word for it.

Rainforest's 2026 vertical SaaS study found 78% of platforms target ≥71% payment adoption but only 25% achieve it, and a C-suite payments leader is worth 45 bps of median take rate
rainforestpay.com ↗
Shopify charges an additional transaction fee for third-party gateways: 2% Basic, 1% Grow, 0.6% Advanced, 0.2% Plus
shopify.com ↗
Jobber charges 2.9% + $0.30 online card, a slightly lower Tap to Pay rate, and 1.0% ACH
myquoteiq.com ↗