Part Two: The Merchant Acquirer’s Guide to Onboarding More Merchants

June 6, 2016


This is the second part in a two-part series on how Merchant Acquirers and ISOs can keep up with the merchant onboarding race in a competitive market. Read Part 1.

Onboarding is the lifeblood of the payments industry, as the ability to add new merchants at a brisk, steady pace separates the strong from the weak. This two part series is designed to refocus your eye on the need to onboard more merchants than your competition, and introduce a few ways to follow through and begin to step up your game. In Part One, we narrowed in how quickly fintech is changing and growing – it’s all too easy to get lost in the crowd while the industry giants and disruptors divide the market among themselves – and addressed some common concerns about the need to focus on onboarding, rather than other growth strategies.

As we said then, it’s easier said than done to follow through and begin to revitalize your onboarding process. Tips and “secrets to success” are a dime a dozen, so this article seeks to cut through the noise and give you sound, practical advice and tips on creating a more efficient business by onboarding more merchants. There’s no guarantee that it will be easy, in fact it might be a bumpy ride (“Life is pain” quipped Wesley in the classic film The Princess Bride, “anyone who says differently is selling something”), but we aim to reduce turbulence and provide a proper foundation for any merchant acquirer to succeed.

The key to this success, as we’ll continually circle back to, is an automated onboarding platform, comprised of a digital merchant application, a risk scorecard, a business rules engine, and an underwriting dashboard.


Managing Data


Acquiring new merchants can often feel like an endless task, pushing a boulder up a mountain only to realize that there’s an infinite supply of boulders at the bottom. There’s simply too much data to sift through. Manual data entry followed by compliance checks (also manual), and a never-ending loop of email all add up to a process that can take days, a week, or even longer. In the digital age, businesses with that timeframe will be fossilized and left to be discovered by future archaeologists.

Instead of using Excel to manage your data, you need to have a centralized dashboard where you can view your merchant application data and underwriting data to gain visibility into the entire process in real time. Not only does it reduce errors, but it provides a more efficient method of processing a higher volume through a dedicated system that centralizes the data, rather than working as a patchwork quilt of spreadsheets.


Reduce Redundancy (And Friction!)


With the amount of paperwork and forms needed in the onboarding process, merchants are often required to submit the same information over and over, which, apart from its obvious inefficiency, creates more friction during the process, and makes for an unpleasant merchant experience. This is further exacerbated by redundancies in the form of collecting information unnecessary for underwriting purposes. Create a Minimum Viable Process that only collects the data you need when you need it, simplifying expectations and the user-experience for both your team and prospective merchants.

Redundancy often burrows its way into your business in multiple forms, making it difficult to track it down and eliminate it. Use onboarding software to replace old legacy systems, take advantage of the data your software gathers and study it to learn how to streamline it even further, and shave time off how long it takes you to onboard an average merchant.

  • Replace Legacy Systems

Legacy systems are still one of the biggest obstacles for companies seeking to thrive in the digital era. These pieces of lumbering software causes problems no matter how many times they’re patched or updated, becoming dead weight that anchor down your business. Replacing them with newer, more flexible technology will reduce friction across the board.

  • Study the Metrics

Take the time to do more than glance at the backend of your software, and measure the stats. Take note of customer data, identify trends, and use your new information to improve the process. This includes not only improving the customer experience, but also the underwriting process, the basic design, and generally refining your entire onboarding process. Use software with a Data Reporting feature that includes the ability to search, aggregate, and visualize any piece of collected data, giving you the tools to calculate the cost to board new merchants and allow you access to all the information you need to streamline it further.

  • Increase Speed

Through an increased efficiency in data management, your ability to onboard merchants is exponentially faster, as a process which used to take days can now take only fifteen minutes. Build a dynamic landing page for your website to give merchants a more intuitive experience filling out forms, and use digital signatures, which are both quick and secure. It’ll not only hook potential clients, but free you up from the never-ending slough of paperwork and give you some breathing room to focus on the big picture. Remember, it’s not just about decreasing time for merchants to complete an application, but reducing the amount of time for the underwriting team to process it without compromising their quality.




While speed and efficiency are the flashing neon lights that call out to prospective merchants with a siren’s song, they’re also fairly meaningless in the long term if you don’t have quality underwriting to match. Disruptors like Square or Stripe can reduce the onboarding process to a minute or two, but they don’t have the same adjudication standards that most acquirers have. The goal is to provide a service almost as fast, without the risk. Great underwriting is how you create a great onboarding process.

  • Build a Rules-Based Engine

This is a term for software that regulates how the merchant’s application is processed. It provides a consistent model of rule-based logic (think of simple If-Then scenarios) to ensure that the application ends up in the right hands. You can automate common checks and balances such as: credit analysis, blacklist checks, ID verification, website due diligence, address verification, tax registration, and more.

  • Develop a Risk Scorecard

Many organizations want simplicity in their underwriting process, and so use a three pronged approach, sifting merchants into either Pass, Fail, or Monitor categories. It’s a common-sense system, but it dances around the fact that underwriting is more complex than that. Merchants with varying levels of risk require different approaches, and some don’t fall so easily into those three categories.


Using a risk scorecard automates that process, and by scoring everything, they provide a fuller representation of each merchant’s profile. It’s simply an automated spreadsheet that takes data from the application process and creates a risk-based credit score, which is then run against the approval threshold. A good scorecard will account for anything from the credit card processing volume, to average transaction size, to the principal’s financial standing, sales channel and method, to the business’ financial standing. This can automate up to 80% of accounts, allowing the underwriters to approve or decline each account with more certainty and in less time, leaving the other 20% up to your team to concentrate on the riskier accounts. Maintaining quality underwriting standards in the midst of a more efficient and streamlined onboarding process is what will determine your longevity. It’s not just about onboarding more merchants, but about maintaining quality as you increase quantity.




Fintech is a brave new world, full of innovation and opportunity, but it is also a harsh, unforgiving world. Onboarding automation software is a lifeline that can allow you to keep up with the disruptors and competitors surrounding you. Increasing your onboarding capabilities is not an optional concept, but a do-or-die philosophy that has to be embraced wholeheartedly. There’s no easy, one step solution, and even all the advantages of automation can’t fix all your problems. It’s a process that requires constant attention to detail; merchants acquirers will never stop adjusting and fine-tuning in order to reduce as much friction as possible. Finding the right system though, which precludes the ability to continue to tinker and scale your onboarding process, is a catalyst primed to help your business grow and thrive in a cutthroat market.