July 3, 2018Blog Posts

TSG Commentary: ISV and VAR Valuations are Rising with Payments Integrations

Though the payments industry has successfully leveraged synergistic value from the acquisitions of, and/or strategic partnerships with ISVs and VARs, there has been a similar effect evidenced on the other side of the equation as well. ISV and VAR owner/operators who have successfully integrated payments into their respective platforms have also borne witness to rising valuations.

  • The need to adopt and sell value added products and services to their respective client bases has acquirers and processors hot on the trail of high quality business management solutions and integrated POS technologies.
  • For ISVs and VARs with payments integration, the terms and conditions of their contractual relationship with their payments service providers can be the difference between a high valuation and low valuation, and in some cases, no valuation.
  • The payments industry is looking to the software community, via VARs, and ISVs for value added products and services. They increase margins, fuel growth, and enhance client retention. They also present an opportunity for the acquiring payments company to grab the existing payments processing business.
  • ISVs and VARs need to understand that if they enter into service agreements with payment service providers that entitle the provider to full or part ownership of the client relationship, they may well have made themselves anathema to that same pool of buyers who are currently driving up ISV and VAR valuations.

Learn more in TSG’s recently released The Last VAR Standing, which provides TSG’s thought leadership around the changing payments ecosystem and its impact on the value-added reseller (VAR) market.

Download a preview  |  Purchase Report

 

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