The Green Sheet Online Edition
August 10, 2026 • 26:08:01
Software companies are becoming ISOs - Here is how you still win
I started where a lot of you started. Card Service International, as an MLS, then I opened my own wholesale ISO out of Valencia, Powerhouse Payments, and we boarded thousands merchants in under five years before I exited. I know the street. I know what it takes to sign a merchant who has been burned twice and does not want to hear the word processing ever again.
Then I went to the other side of the table. For the last decade I built the payments businesses inside vertical software. Applied Pay at Applied Systems, on the insurance agency side. Duck Creek Payments, on the carrier side. My job was to take software that already moved billions in premium and turn the payments running through it into a revenue line the platform owned.
That is where I want to be honest with you, because what I saw over there changes the math for everyone reading this.
Sales without a pitch
The software company is quietly becoming the ISO. And it does not have to do a single thing you have to do to win a merchant.
Think about what it takes for you to board an account. You find the merchant. You get past the gatekeeper. You pull the statement, you mark it up in red, you build the case, you handle the objections, you earn the trust, and then you spend the next two years defending the residual against the next rep with a sharper rate. That is the job. That is the whole job.
Now watch what the platform does. It does not find the merchant, because the merchant is already inside the product, running the whole business on it. There is no door to get past. There is no statement to pull, because the software already sees every dollar that moves. There is no trust to win, because the merchant already logs in every morning. When the platform flips payments on, it is not selling anyone. It is turning a switch on a customer it already owns.
That is not a better sales pitch. It is the removal of the sales pitch. And it is happening in every vertical, from insurance to healthcare to property management to the licensing boards a govtech platform serves.
Adjusting to win
I am not telling you this to scare you. I am telling you because the people who see it early are the ones who adjust in time. So here is the part that actually matters. Here is how you still win:
First, go where the software is not. Every platform picks a lane and ignores the rest. The complex merchant. The multi-location operator. The business that needs a human being when the batch does not settle at midnight. The vertical too small for a platform to ever build for. That merchant does not want a switch. That merchant wants you.
Second, stop selling rate and start selling the one thing a platform cannot fake, which is you. A platform will never sit across a desk. It will never restructure a deal when the business hits a rough quarter. It will never pick up the phone at nine at night. The relationship was always the moat. It just matters more now that the commodity part is being automated away.
Third, and this is the one most of you are sleeping on. Become the payments expert the platform does not have on staff. I have sat inside these software companies. They are brilliant at their vertical, and they do not know payments. They do not know interchange. They do not know where the buy rate leaks. They do not know how to structure a sponsor bank relationship.
That is a gap, and a gap is an opening. The rep who understands the payments economics can walk into a software company and become their partner instead of their casualty. I have watched it happen from the inside, more than once.
Go where others aren't looking
Interchange optimization is real money wearing a boring name. The buy rate that got written once at launch and never reread is a leak nobody is defending. Those things do not disappear because the merchant moved inside a platform. They just move to a place most people are not looking. So go look there.
The uncomfortable truth is that the acquiring business you learned is being rebuilt underneath you, and it is not going back. The comfortable truth, the one I would bet my own career on because I already have, is that payments has always rewarded the person who understands where the money really moves. That person used to walk the street. Now they walk into the software company. Same skill. A different door.
The switch is easy to flip. Knowing whether the economics underneath it are any good is not. That part is still your job, and nobody has automated it yet. 
Allan Lacoste spent 25 years in payments, from bootstrapping his own wholesale ISO to building the embedded payments businesses at Applied Pay and Duck Creek. He now advises software platforms and their sponsors through LAC Strategic Ventures. Reach him at lacoste@allanlacoste.com or at allanlacoste.com.
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