New research reveals merchants are steering customers to lower-cost payment methods amid economic headwinds, while software providers lean on integrated payments to protect revenue

New research released today from Wind River Payments ^TM , an integrated payment processing and services company, reveals economic headwinds and rising fees are prompting a major shift in the payments landscape. According to the 2025 Payments Report, 69% of merchants say they’ve changed how they accept or process customer payments due to recent economic challenges. Another 12% plan to make changes.

Merchants and independent software vendors (ISVs) are actively rethinking how they approach payments and preserve margins and profitability. Merchants are encouraging consumers to use lower-cost payment methods such as debit and ACH (25%), offering cash discounts (23%) and adding fees to credit card transactions (25%). Meanwhile, ISVs are doubling down on payments monetization: 96% of ISVs that offer integrated payments today either have already or plan to explore new ways to monetize payments this year.

“Payments have evolved from a back-office function to a strategic lever,” said Tyler Kattre, President at Wind River Payments. “Merchants are using payment choice more deliberately to manage rising costs, while software providers are using integrated payments to create stickier products and increased revenue. This sharper focus on payments will continue to grow as merchants and ISVs look for new ways to stay competitive, build resilience, and adapt to rising economic pressures.”

Wind River Payments’ research – The 2025 Payments Report: Macro Pressures Shaping the Landscape for Software Providers and Merchants – is based on a survey of more than 200 ISVs and merchants across the U.S. Key findings include:

• Fraud is rampant – and merchants have had enough. Nearly two-thirds of merchants experienced fraud in the past year, and many are willing to open their wallets to fight back. Most (88%) say they would pay more for enhanced fraud prevention.
• Fraudulent chargebacks (28%) were the most pervasive fraud type last year, followed by return and refund fraud (25%) and phishing or scam attempts targeting merchants’ business or staff (20%). Merchants report experiencing direct loss of funds (34%), lost or delayed revenue (27%), and customer trust issues (15%) because of fraud incidents.
• Nearly 30% of merchants have lost revenue due to payment issues in the last three months. Top challenges include lost sales due to slow checkout or payment failures (15%) and an inability to support consumers’ preferred payment methods (19%).
• U.S. digital wallet adoption lags. Eighty-five percent of merchants report that less than half of their transactions currently come from digital wallets. For nearly two-thirds, that number is under 25%.
• Rising payment costs are quietly driving up prices for consumers. Nearly half of merchants say their payment processing rates have increased in the past year. Many merchants are responding to higher payment processing costs by raising costs for consumers (46%) and surcharging (36%).

ISVs Lean on Integrated Payments as a Key Revenue Stream

Forty-one percent of ISVs that offer integrated payments today say that more than half of their total revenue currently comes from payments. Revenue generation is ISVs’ top business priority (57%), which reflects the mounting economic pressure on software companies’ profitability. ISVs are most concerned about inflation and rising operating costs (47%), global trade shifts and tariffs (44%), and rising interest rates and cost of capital (30%).

Software providers say integrated payments help drive their business success by providing new revenue streams through payments monetization (41%), enhancing the experience to improve customer satisfaction and retention (31%), and driving platform differentiation (23%).

Dive deeper into the state of payments with the full report linked here.

About Wind River Payments

Wind River Payments is a multi-generational, family-owned integrated payments and merchant services provider based in Madison, Wisconsin. Since 1999, Wind River has brought its unique, After the Handshake commitment to make payments simple, secure, and cost effective for thousands of loyal customers and software partners across the country. A key area of specialty is working with SaaS providers to not only integrate payment acceptance in their platforms but to strategically help them grow their software sales and leverage payments as a key differentiator. For more information, visit www.windriverpayments.com

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