If you’re a payment company looking for a merchant onboarding solution, you’re probably experiencing the following:
- Up to 30% of your prospects drop off because of friction during the process, causing a loss of revenue and increased customer acquisition costs.
- You’re using multiple onboarding solutions that increase vendor relationship complexity without resolving your customer attrition.
- Sales productivity is going through the floor with administration overheads.
- Teams are drowning in manual tasks, lengthening the process which further frustrates prospects.
As experts in merchant onboarding, we understand these issues well. We started out as a KYC (Know Your Customer) and KYB (Know Your Business) solution but quickly understood that the real problem wasn’t completing identity verification. It was streamlining the complete onboarding process, from offer to approved in a full automated and seamless process.
Through deep research across hundreds of clients globally, and into every onboarding touchpoint, we designed our platform into a single, all-in-one solution.
We’ll share the common challenges payment providers and processors face in onboarding new merchants and why current solutions don’t work. You'll also discover how OnBoard by MVSI is uniquely positioned to solve the end-to-end onboarding process for payment companies.
Key Takeaways
- 2 common merchant onboarding challenges that hinder growth and increase acquisition costs
- Why most solutions on the market don’t solve merchant onboarding attrition (and what to look for)
- A better merchant onboarding alternative: OnBoard (and how it works)
- Why choose OnBoard as your merchant onboarding solution
- How an international payments firm added $85 million in new revenue in 2 years with OnBoard
Looking for a comprehensive merchant onboarding solution? Contact us or book a demo to learn how OnBoard can help you increase conversion rates by 35%.
2 Common Merchant Onboarding Challenges Impacting Growth and Costs
When merchants churn during the onboarding process, your customer acquisition cost (CAC) increases, your revenue decreases, and your sales team is less productive.
This means the return on investment (ROI) of reducing your onboarding attrition from 30% to 10%, 5% or even 0% is enormous.
But what are the root causes of merchant churn during onboarding? Two key factors play big parts:
1. Requesting Too Much Information Causes Merchant Frustration & Drop-Off
As a payment company you must gather extensive information about merchants—who they are, what they're selling, their target audience, and sales locations.
But this process leads to a lot of drop-offs, especially in e-commerce and high-risk merchant categories.
Based on a study by ABBYY, 90% of companies lose potential customers during the digital onboarding process because of long processes and too many manual steps. The application process requires a lot of manual effort, or digital
but overly complicated due to the complex nature of the questions, such as:
- The merchant’s organizational structure.
- Risk-related information from card schemes.
- Details on corporate history, related individuals, and beneficial ownership requiring background checks.
- Identity verification for all key individuals involved, including proof of identity, driver’s license and proof of address.
- Payment product information to make the account operational.
Merchants used to dealing with everyday banking transactions will quickly find themselves overwhelmed by these demands. Considering the competitive payments landscape, merchants would rather abandon your complex forms in favor of simpler solutions.
2. Multiple Touchpoints Delay Approval & Cause Friction
According to research by Signicat, around 42% of merchants churn because of long approval times. This is due to a lack of communication between departments with different goals:
- Compliance wants to ensure adherence with regulatory requirements to prevent fines, closure or reputational risks.
- Sales and growth departments focus on customer acquisition to increase revenue and scale the company.
- Fraud is out to protect the consumers and the company from financial losses.
- Risk concentrates on minimizing financial exposure and potential losses.
These different areas of focus often put these departments at odds with each other, preventing them from sharing data and slowing down the verification process.
As a result, merchants often need to go from one department to another sequentially. From legal and risk to compliance and sales, merchants repeat the same answers just to get their account live. This process can take weeks before the company approves the application.
For example, the risk department assesses the application and asks the merchant various questions about their business model and merchant history. Then the fraud team follows with similar inquiries looking for red flags and suspicious activity, while compliance demands more intricate information on beneficial owners. At this point, the frustrated merchant has had enough and abandons the sign-up process.
This multi-touch process also increases friction among the different departments as each sees the other as an obstacle to reaching their goals.
Why Most Tools Don’t Fix Merchant Onboarding Attrition
Most solutions only solve one part of the onboarding process. They excel in one area, but don't solve other friction points, such as risk and underwriting, fraud detection and prevention, or prospect and product management.
For example, your AML (Anti Money Laundering) and KYC process could be great for merchants, but terrible for your compliance team because it generates too many false positives. Or your onboarding solution might handle fraud well, but still create friction in the merchant onboarding experience.
So, you wind up creating a patchwork of individual vendors that solve each aspect of the onboarding process individually. But this approach siloes data, creates merchant and cross-department friction, and increases drop offs.
The end result is a complex web of vendor relations that aren’t solving the root cause of your customer attrition, which is end-to-end friction between steps and onboarding departments. We’ve seen many companies change providers every few years because of this.
So, what should you look for instead?
Choosing the Right Merchant Onboarding Solution
Look for three key factors in an onboarding solution to address customer attrition and speed up the process compliantly:
1. A solution that is genuinely end-to-end.
An effective merchant onboarding platform should take care of all the touchpoints in the merchant journey, from product management and identity verification to risk and compliance, and including ongoing monitoring and validation. Using a single solution prevents relying on multiple, disconnected software that don't integrate smoothly—causing merchant frustration—or department-specific platforms that silo data and communication.
2. A platform that enables you to set up dynamic and intelligent workflows.
Look for AI-powered solutions that automate both the merchant and departmental steps as much as possible to cut friction and offer the best possible onboarding experience.
For example, auto-filled sign-up forms and smart cues prepare merchants for their next steps to reduce frustration while AI-driven risk engines automatically assess fraud, risk and compliance adherence. Set up rules to push only rare exceptions (e.g., increased risk) to your different departments for manual reviews.
3. One solution, driving up conversion rates across sales, fraud, risk and compliance
Make sure your merchant onboarding solution works equally well for every department. Once you align your sales, compliance, risk and fraud department, you can reduce approval times and get your merchants live faster.
A Better Merchant Onboarding Alternative: OnBoard
OnBoard is an all-in-one solution that automates your merchant onboarding process from end to end.
Our clients range from enterprise-level to boutique-size payments and financial services firms that turn to us for our robust yet flexible solution that's highly customizable and scalable. Global companies like Nayax, Fiserv, CloudPay and Xplor trust us to onboard merchants worldwide quickly, compliantly and efficiently.
Our one-of-a-kind software is available in 200+ countries in 20+ languages, enabling a multi-lingual merchant onboarding process and 24/7 global support.
With OnBoard, you'll have complete onboarding functionality that starts with prospect management and follows through to new merchant logins.
Here’s how OnBoard helps you manage the entire process smoothly:
- Set up your products and services directly on the platform and offer one or multiple services and products in any language.
- Create, white label, and communicate offers directly from the platform in minutes. Choose quick offers via templates you pre-configure or customize your proposal, pre-filling fields with existing data to save merchants time.
- Manage your prospects through a customizable dashboard that provides end-to-end visibility with real-time progress tracking, historical communications, and incomplete actions. Send personalized emails or trigger automated reminders to nudge merchants to complete steps.
- Customisable KYC, KYB, and AML rules according to your compliance needs, and for any legal entity type, and merchant risk profile anywhere in the world. Our AML API instantly scans global watchlists such as sanctions and politically exposed persons (PEP) lists.
- Set precise rules for our AI-powered credit and risk engine that fully automates your checks. Prioritize criteria with customizable scoring or text flagging. Save time with reusable risk templates or personalize new engines per account.
- Accelerate approvals with automated underwriting and focus only on exceptions by using ‘auto-pass’ for clean accounts. Automated notifications instantly alert the right stakeholders. Finalize quickly with integrated sign-offs.
- Automate partner identity checks in as little as 15 seconds with a 95% pass rate. Customize rules and get real-time assessments. We match data against global and local sources, such as company registries, credit bureaus, and more.
- Run your data collection and storage on auto-pilot—our platform takes the screenshots and gathers necessary documentation for you.
- Send your client live automatically. We take care of all the data integrations during the fulfillment process.
OnBoard also includes extra services and post onboarding functionality. You'll have ongoing continuous due diligence (OCDD), friction point management, and growth management tools. Transaction monitoring coming soon.
Why Choose OnBoard as Your Merchant Onboarding Solution
You only need one solution to onboard your merchants—and this is what OnBoard does.
We designed a platform that is one of a kind in the regtech market, and displaces up to 23 disparate tools. By using OnBoard, whether you are a payment service provider (PSP), bank, acquirer or an independent sales organization (ISO), you can create productivity gains and cost reductions no matter your type of payment or financial institution.
We’ve helped our payment customers go from 15% customer growth to 30%. Use our ROI calculator to see how much you can lower your attrition rate with Onboard.
Dynamic Smart Forms increase your conversion rates by 35%
Merchants drop off not just for the amount of information required. They’re often asked complex questions they don’t know the answer to.
Our Smart Forms solve this.
These interactive merchant application digital forms use real-time logic, validation rules, and integrations to speed up the application process, tailoring the journey to each merchant based on the info provided. This makes merchants feel guided through each step, instilling greater trust and engagement with your company and reducing drop-offs.
From contract offers and product management to compliance, risk and IDV, smart forms remove the friction from your entire onboarding process by:
- Auto-populating fields based on info provided, saving merchants time.
- Validating information in real time—including flagging errors or asking for additional documentation upfront—so merchants can update data on the spot, quickening their journey.
- Dynamically showing or hiding fields based on previous answers, creating personalized form paths that reduce redundancies and make sense for the merchant.
- Cueing merchants on next steps (e.g., types of documentation required), managing expectations while reducing frustration.
- Allowing merchants to upload registration documents and use digital signatures during the application process, avoiding tedious and time-consuming manual effort.
- Connecting with your databases, CRM systems, and other business applications for seamless processing and automated audit trail creation.
- Automatically calculating outcomes (prepayment exposure, volumes, margins, based on the provided details (when selecting payment products), so it asks fewer questions.
Smart Forms feed merchant information into a risk engine—customizable based on your requirements—which makes the pass or fail decisions for IDV, KYB, AML, risk and underwriting.
By transforming the merchant experience and lifting conversion rates, dynamic Smart Forms do more than just reduce drop-offs. They instill merchant satisfaction from the very start.
No-Touch Solution That Cuts Onboarding Costs by 70%
Manually processing hundreds of merchant applications, generates high onboarding costs. This drives many companies to outsource this task because they lack sufficient in-house resources.
So, if you’re paying over $1 million to an external onboarding team, you can reduce that number by 70% with OnBoard, adding $700k back to your bottom line.
Our no-touch onboarding solution helps do the work of each department. Your teams will get the documentation and information they need easily while our AI-powered risk engine evaluates applications, from ID verification, fraud and risk in real-time.
Here's how OnBoard reduces your departments’ workload:
Sales and revenue
Automate your offer generation and product management, so new merchants can be onboarded and go live in minutes. You can personalize each offer, track progress and communicate with potential customers directly through the OnBoard.
Fraud and risk
Automate your entire risk management, from fraud and credit to brand reputation. Our risk engine evaluates IDV, KYB, KYC and multiple risk types in real-time. Teams receives notifications only when human intervention is needed.
Compliance
Automate all compliance checks and AML evaluations. Create and save audit trails in the cloud without manual work or digital storage space necessary.
For example, one of our fintech customers reduced their team by 90% once they started using OnBoard. Yet they increased their onboarding visibility by being able to track the entire user journey at any time from one platform.
Another customer, a national EFTPOS provider, partnered with OnBoard to enable same-day merchant onboarding. They gained increased visibility, from prospect to approved customer, while automating every aspect of the customer signup process.
Thanks to this partnership, the company:
- Reduced their onboarding team headcount
- Decreased customer acquisition time by 12 days
- Cut abandonment rates by 30%
OnBoard enables you to cut costs and workload while gaining greater control and visibility over the entire onboarding journey.
Contact us to learn how OnBoard can align your teams.
Increase Onboarding Efficiency Across Departments by 80%
With OnBoard, you'll get a unified solution and industry expertise that enables greater visibility and efficiency across every onboarding department.
OnBoard operates like a intelligence engine. We’ve spoken with our customers and accumulated knowledge on best practices for compliance, risk and sales around the world, from the UK and France to Nigeria, Hong Kong and Singapore. Our deep work has made us global leaders in frictionless onboarding.
This means we have the track record and insights to help all your departments meet their goals and achieve:
- 80% reduction in fraudulent applications passing the onboarding process
- 50% increase in sales productivity
- Guaranteed compliance with every regulator worldwide
How do we guarantee compliance worldwide?
With unlimited configurability and automation of the compliance workflow:
- No matter your operating country
- No matter your risk level
- No matter your merchant business type (e.g. adult entertainment, iGaming)
- No matter the currency
OnBoard dynamically adapts your onboarding workflow to satisfy the exact regulatory requirements for any merchant type.
You'll also have subject matter experts in various regions and categories, from identity verification in Germany to FCA regulation in the UK, and FinCEN and the Patriots act in the US. So, we can help you configure our system to produce the right outcomes for specific business cases, compliance requirements and identity checks.
For example, a multi-national software as a service (SaaS) firm partnered with OnBoard to streamline their compliance checks. They wanted to ensure their many partner brands offering point-of-sale, e-commerce, and embedded payments to their new multi-industry merchants could reliably comply with the AML laws in each market they operated in.
OnBoard provided the SaaS with unified visibility into every offer made from 20 brands in 9 countries in 6 languages. We ensured the company completed 2,000+ KYB and credit risk assessments quickly, with minimal partner or merchant impact.
OnBoard's compliance support was so effective that, after an audit by Dutch authorities, the regulator complimented the SaaS company for having the best compliance documentation they had ever seen.
Driving $85M in Revenue in 2 Years with OnBoard
OnBoard doesn’t just help companies get new merchants up and running. We also help with partner management across the payment processing ecosystem.
An international payments firm approached us when they needed to boost growth in their lagging Australian market. Their strategy was two-fold:
- Build a reseller channel made up of ISOs and Payfacs
- Use a completely digital onboarding solution to sign up new merchants fast
In just two years of using OnBoard's end-to-end solution for their new partnership management and merchant onboarding, the payments company:
- Grew their reseller channel to 120+ ISOs and payfacs
- Signed up over 20,000 new merchants via their resellers
- Generated over $85 million in incremental new revenue for the fintech
Considering the success in their Australian branch, the firm is now rolling out the same strategy with OnBoard for its Asian market.
Automate Your Merchant Onboarding Process with OnBoard
With OnBoard, you can solve merchant friction in the onboarding process. Increase efficiency and conversion rates and reduce drops-offs onboarding costs, all through a single solution.
You'll help align teams and create no-touch flows that help onboard merchants quickly, without frustration or long approval times. By eliminating friction, you can turn prospects into partners more quickly, driving growth and scaling your business.
Get your merchant onboarding right with OnBoard. Book a demo or contact us to learn more.
