Rapid Customer Onboarding Makes Financial Sense

If you work in sales and marketing in the payment processing industry, chances are you’ve already heard of the recent success of Square. You have likely noticed that your customers are beginning to demand the signup experience Square offers. They want to be able to sign up for an account in minutes and start accepting payments immediately. And if you’re like the companies we speak to every day, you’re probably tired of explaining why your company can’t offer the same quick service. It’s frustrating to lose because of a slower customer onboarding timeframe. But what if you could be as fast as Square? This post is about how to convince your boss that rapid customer onboarding is a crucial need for your payment processor.

The key to persuading most managers to the importance of rapid customer onboarding is establishing that it makes financial sense. Which it does. By reengineering the business processes behind customer onboarding, banks can improve their profitability and offer more value to their customers. It’s a win-win situation for both parties. And, with the SaaS smart process applications available today, the amount of time and effort required to automate the onboarding process is manageable in as little as a few months.

Automated customer onboarding means a shorter onboarding period, which allows revenue generation to start earlier. The typical two weeks between signing up and approval is usually not viewed as revenue lost, but it makes sense to think of it that way. During the onboarding time period your new merchants are processing payments through another processor instead of yours. So as you can see, shortening the customer onboarding period results in more revenue.

What could two extra weeks of processing revenue from each merchant amount to in a year?

A study conducted by the Oliver Wyman Group reported that 75% of banks estimate that automated onboarding will lead to revenue increase per client of about 10-30%.

In addition, streamlining the business processes behind customer onboarding reduces its cost. Rapid customer onboarding automates much of what employees currently do, reducing the number of people needed to onboard new customers. 58% of the banks in the Oliver Wyman study believe automation would lead to cost reductions of between 10-30% for customer onboarding.

There are strong financial incentives for banks to automate their onboarding process. Square is a clear example of a payment processor that has automated their customer onboarding with success. The question executives at banks should ask themselves is not, “Why should I automate my onboarding process?” but rather, “Why haven’t I automated my onboarding process already?”

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This post is the last of a four part series on how Square is disrupting the payment processing industry. Using innovative business processes they provide a better customer experience to their customers at a lower cost than their competitors. We’ll discuss our thoughts on what makes Square different, how Square has achieved success, and what payment processors, acquirers, and super ISOs can do about it.