Merchant Software Guide: Cost Center or Revenue Generator?

October 20, 2021

merchant software

Every time a revolutionary new idea hits the market, there is doubt that instantly follows; suspicion about whether the innovative technology is truly “the next big thing” that will “completely change the face of an industry.”

Automation and the onslaught of machine technology have been the center of this type of debate for the last decade and continue to be a topic of discussion into today, where they are hailed as both humanity’s best ideas yet and the self-destruction of the human race. Cut through all the speculative talk and the hyperbolic language and you’ll find some positive statistics that ring loud and true, especially when it comes to improving the merchant underwriting and onboarding processes for businesses in the payments industry.

Automated underwriting software solutions like the ones offered by Agreement Express are lauded for causing some pretty remarkable improvements in business processes; using our software, underwriters have been able to see their application volumes swell by 10 times their normal amount, and companies have seen a 70% reduction in abandonment rates because of how smooth and quick the process becomes. The cherry on top is the 30% reduction in NiGO rates, further improving overall experience for both underwriters and clients.

What Does this Shift Mean for the Payments Industry?

Automation is truly becoming the gold standard in essentially every industry, and the best way to go about implementing automation into business procedures is to buy existing software that is easy to implement and simple to learn. Some companies attempt to build software specifically for a need or process, which often leads to a static solution that needs continual development and employee labor to keep it up. Rather than funneling resources and time into building new software, consider buying software that has been developed for dynamic and scalable use to take the weight of updating and revising off of your business and onto the experts. This allows you to take advantage of automation without technical difficulties.

The benefits of automation to the payments industry specifically are synergistic in nature. When certain processes like underwriting and onboarding implement automation, the human factor is not thrown out altogether. Rather, the strong suits of automated underwriting software complement the skills of the human eye. Software calculates numbers and parses through data faster and more accurately than any human, and humans have the capability to use multi-factorial thinking in order to make executive decisions, the likes of which machines cannot attempt (yet). Automation grants underwriters more time to think strategically about their processes and ensure that it is running optimally, while giving them peace of mind that their data is correct.

Thus, there are more doors open than ever in the payments industry; processes that typically hold back payment entities are being met with innovative, intelligent, automated solutions, which unleashes the true potential of payments businesses. Implementing automated underwriting systems means a decrease in data error and an increase in speed because of fast and accurate data gathering and interpretation. Plus, the more data processed by automated underwriting software, the “smarter” the software becomes, able to identify risk patterns and potential fraud identifiers with ever-increasing precision.

Merchant Software: Automated Underwriting System

Overall, there’s a lot to take in when learning about how exactly automated underwriting software can work for payments companies. But what are the actual benefits of automated merchant software?

First of all, as touched on slightly above, this software automates tasks that underwriters would have to spend time completing. Instead, automating things as simple as data entry and NiGO checks can save a massive amount of time, meaning fewer employees can take on more clients and spend more time on bigger and more complex tasks instead of drowning in the minutiae of underwriting.

Secondly, companies that use merchant software end up taking on more and happier merchants because of the reduction in friction and faster turnaround times for approval or denial. Automated risk thresholds can automatically deny a merchant that does not meet basic qualifications of approval, and allow underwriters to spend more time on qualified candidates, getting their approval to them faster.

Furthermore, leveraging merchant software solutions result in less error in data entry because of automated data copying and integration. For example, Agreement Express’s software automatically imports data from existing documents and does automatic checks to make sure all data matches across all documents. This significantly reduces both the amount of time underwriters have to spend entering data, and the time they spend checking to make sure documents are NIGO-compliant. Investing in the future of a company by purchasing innovative software like Agreement Express that integrates with your existing CRM and tech stack means that you’re adding more tools to your tool kit.

Finally, merchant software is incredibly adaptable when developed by experts in both the payments and software industries. Agreement Express’s merchant software updates to stay constantly compliant and is completely scalable to meet the size of your business and the types of your merchants.

Are there Downsides to an Automated Underwriting System?

It is a commonly held belief that a business shift towards automation would cause an increase in risk, but that could not be further from the truth. In fact, there are companies, such as Schlitz Beer, that have been forced to automate in order to survive.

Long is the list of companies that have completely vanished because they have neglected to seize the technology of the day and age. While it’s one thing to be cautious about implementing new solutions without any proof of efficacy, it’s another to ignore the clear benefits and hardened numbers of implementing technology for a process that has room for improvement, like merchant underwriting and onboarding.

The very human “gut feeling” that heavily influences underwriting decisions is another hesitation held by those wary of automation. Without automation, many underwriting decisions are typically made based on intuition. Merchant software like Agreement Express’s tools allows data to have a stronger influence on the final decision to approve or deny, leading to a more informed outcome due to combining automation and human decision-making.

Merchant Software Conclusion

With good, effective technology comes a single, up-front cost that pales in comparison to the amount of returns companies see from adapting to a changing business landscape. Calculate how much you could be making with Agreement Express with our free ROI calculator.

So is merchant software a cost center? No, it’s a long-term revenue generator that will put your business at the forefront of the payments industry.

Sign up for a demo of Agreement Express’s software to get ahead in this automated underwriting revolution.