The Challenges of Manual Merchant Onboarding
Merchant onboarding is a critical process for acquiring businesses that involves acquiring, analyzing, and integrating large volumes of data. However, the manual and time-consuming nature of this process often results in delays and errors. For instance, if data or knowledge of the merchant is lacking, then identity can’t be validated. Compliance with Know Your Customer (KYC) and other governmental regulations has to be determined, as does creditworthiness. This takes days and can still involve a high degree of manual handling. To streamline this process and make it more efficient, automation is the way forward.
Compliance with KYC and Other Regulations
KYC stands for “Know Your Customer” and is a process that financial institutions and other regulated companies use to verify the identity of their clients. This process involves collecting and verifying various types of information about the client, such as their name, address, date of birth, and other identifying information. The objective of KYC is to prevent financial crimes such as money laundering, terrorist financing, and other fraudulent activities.
During the merchant onboarding process, compliance with KYC and other governmental regulations is required. Failure to comply with these regulations can result in fines and other legal consequences. By automating the merchant onboarding process, companies can streamline the KYC process, making it quicker and more efficient, while also ensuring compliance with regulatory requirements.
The Benefits of Automation
Simplified Data Integration
To simplify data integration, acquirers need to access and efficiently handle and analyze all data sources such as bank account information, commercial data, address verification, KYC checks, credit score, and more. To achieve this, a merchant onboarding solution with integration capabilities that can rapidly aggregate data from various sources is required. Non-standard data, such as that from social media, can supplement sources – if the acquirer has the means to get at it and pull out what’s relevant. To achieve this, the best solutions offer pre-built adaptors built on industry standards.
Operationalized Risk Models
Operationalized risk models play a critical role in the merchant onboarding process. They integrate with the other elements that make up the end-to-end merchant onboarding process, ensuring that risk decision-making is not a bottleneck in the process. Technology and model-agnostic solutions can 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 lets business users quickly establish the relationship between the risk model and the automated onboarding process.
Effective management of data is essential to a rapid, efficient merchant onboarding process. 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 learn more about simplified data integration and operationalized risk models for merchant onboarding, check out our guide on our website.