Merchant onboarding is a tedious process requiring substantial amounts of information and paperwork. It is not an easy task and can lead to chaos if done incorrectly. However, it does not need to be a time-consuming process with the use of a digital onboarding form. Below are some helpful tips to make the process faster and easier for the merchant and the payment provider.
A PSP evaluates a merchant for a merchant account by reviewing the applicant’s resume, verifying their credentials, and asking why they want to join the team. The process is similar when PSPs add new merchants to their customer portfolios. They need to look at the risk profile of the merchant, as well as the merchant’s credit history.
In the past, the merchant onboarding process was very manual and involved paperwork. Prospective merchants had to submit paper applications to underwriters one by one. The time it took to get a merchant accepted and start processing was longer than it is today. However, the process is becoming more automated and fully integrated with technology and aggregators. The online submission of application data is crucial to improving the onboarding process. Another enhanced aspect of this process is the integration of pre-allocated MID blocks and API-based data submission.
Manual processes slow the process down and introduce the possibility of human error. This manual process also adds a substantial cost to the process. Everyone involved in the merchant onboarding process must understand the risks and their countermeasures. Automation can reduce the time the onboarding process takes and make it easier for employees to understand their risk appetite.
Nobody can overstate the importance of merchant onboarding. A more stable merchant base means more potential transactions for a PSP. But a questionable merchant can result in fraudulent transactions, causing a loss or charge for the acquirer. For these reasons, merchant onboarding is critical to maintaining a successful payments business.
As the payments industry grows, so do the risks associated with the fraud. A merchant must balance onboarding good merchants with preventing bad ones from ruining their business. Fortunately, technology is now available to help enterprises to manage risk and onboard the best merchants. It is possible to automate this process with the help of AI, bots, and algorithms.
Often, the payment processor will accept a new merchant quickly if all the necessary documents are submitted promptly. With a good payment processor, the merchant onboarding process can be completed promptly and efficiently, which is made possible with an API. For those who do not have a payment processor, there are several types of onboarding tools available to help streamline the process.
Automating this process can help a merchant acquirer avoid costly mistakes. Automated services can bring disparate data points together and give the acquiring organization a coherent picture of the merchant portfolio. Automation helps the acquiring organization to make more informed decisions and reduce the risk associated with a higher-risk merchant.