Author: Anjali Joglekar
The merchant onboarding process is often manual and time-consuming. It involves acquiring, analysing and integrating large volumes of data. If data or knowledge of the merchant is lacking then identity can’t be validated. For this reason, merchants have to go through a lengthy and complex process of proving their corporate identity, reliability, history and more. Compliance with Know Your Customer (KYC) and other governmental regulations has to be determined, as does credit worthiness. It takes days and can still involve a high degree of manual handling.
Automation can make the whole thing simpler and quicker. Multi-layered due diligence is still a must – without it if the merchant is found to be non-compliant with regulations then fines can be involved, while badly assessed risk and fraud can land the acquirer with losses.
To transform merchant onboarding, look for two capabilities in a solution:
- Simplified data integration – acquirers have to tap into a range of data sources to onboard a merchant – bank account information, commercial data, address verification, KYC checks, credit score and so on. It is a challenge to access and efficiently handle and analyse all this data, particularly when legacy systems don’t link together. ‘Non-standard’ data – such as that from social media – is now available and can supplement sources – if the acquirer has the means to get at it and pull out what’s relevant.
To progress away from outdated manual processing, look for a merchant onboarding solution with integration capabilities that can rapidly aggregate all of the data from its various sources. The best solutions offer pre-built adaptors built on industry standards.
Also important is a simple visual interface that enables not just IT but business users to configure data requirements without recourse to programming.
- Operationalized risk models – once the acquirer has its risk model, it needs to integrate it with the other elements that make up the end-to-end merchant onboarding process; without this, risk decision-making can itself become a bottleneck in the process. This is where operationalized risk models come in. Technology and model-agnostic solutions are able to integrate with SAS, Excel and anything else besides.
Business-defined rules lay down the terms and conditions for each merchant and identify exceptions that require further investigation. A visual interface again lets business users quickly establish the relationship between the risk model and the automated onboarding process.
Effective management of data is at the heart of rapid, efficient merchant onboarding. Technology for automated risk analytics and decision-making, integrated into the onboarding process taps into multiple data sources and systems for a streamlined end-to-end process. To find out more about simplified data integration and operationalized risk models for merchant onboarding, have a look at the guide on our website.