How To Create an Effective Merchant Onboarding Process

Merchant onboarding practices are the first impression of your business to a merchant. If you cut corners or fail to follow industry best practices, this will reflect poorly on your business and cause merchants who might have otherwise conducted business with you to run for the hills.

Companies must exercise caution when onboarding new merchants because the payments sector is constantly expanding and changing. They must make sure that good merchants may be approved as quickly as possible and in a simple way while preventing bad ones from entering their system.

In this article, We’re going to cover the basics of what’s the meaning of merchant onboarding, best practices, and the information you need to collect from your onboarding form.

What is Merchant onboarding meaning?

A merchant onboarding procedure is required for all new customers that are signed up by payment processors or payment service providers (PSPs), such as credit card processing businesses. This isn’t as straightforward as asking a company if they want to use their financial services, mainly since fraud is a possibility.

The U.S. Federal Reserve conducted research in 2019 and found that 174.2 billion non-cash payments totaling $97.04 trillion were made in 2018. This opens a vast field for con artists, thieves, and money launderers, many of whom carry out increasingly cunning attacks.

Due to this, it’s critical—and required by law—that payment service providers must gather adequate data about potential new merchants to carry out a comprehensive risk assessment to ensure a seamless and legally compliant merchant onboarding process.

A merchant may need to go through more rigorous risk management procedures if they fall under a dangerous category and they are usually denominated as high-risk, but striking the right mix between speed and thoroughness can be challenging.

Best Practices for Proper Merchant On-boarding.

Merchant On-boarding best practices can save you time, money, and frustration, by streamlining the process of getting new merchants live with your gateway. This introductory process can often be a determining factor in whether a new customer takes advantage of your products and services. There are seven steps to successfully onboard a new merchant that you can find below.

7 Steps to onboard a merchant:

  • Pre-screening
  • Verifying the identification of the merchant
  • Check the business’s history
  • Analysis of the operational and business models
  • Web content evaluation
  • Conformity with information security
  • Credit risk analysis

Automation is a crucial element in developing a more effective onboarding procedure. Manual labor, such as data entry, which may need to be done several times, is a big source of frustration for the sector. Manual labor slows down the process and increases the likelihood of unavoidable human error. This is not to argue that manual verification shouldn’t be part of the process at all. Instead of concentrating on data entry, workers should focus on fraud detection.

Furthermore, automation makes the integration of the phases easier. The entire process may be automated if data is digitized from the beginning, especially in the case of smaller retailers. Dramatic gains are already achievable because of new risk assessment automation, as well as integration and optimization technologies that exist on the market.

The best way to create a merchant onboarding form.

We already know how important it is to verify all the information about the merchant. To automate this process and make sure that you will acquire all the necessary data, you can use a form where users can drop their files and fill in basic information that we need to have about them, the company they run, and their digital presence, among other things.

The best way to have a simple-to-use form that automates not only the collection of documents but also the sending of reminders is by using a document collection software service, such as File Request Pro. You can create forms with multiple pages that instruct clients on what to upload. File Request Pro also allows you to send material and files organized into the appropriate folders, automatically, to your cloud drive. Google Drive, OneDrive, SharePoint, and Dropbox are all natively compatible with File Request Pro.

It is also very easy to create the forms requesting the information. In the following video, we show you how to set up file requests to create a merchant onboarding form and how to configure reminders so you can guarantee that you will never miss a crucial document in your onboarding process.

File Request Pro makes it simple for your customers to provide you with onboarding information. Once you’re set-up, your first request can be on its way to your client in just a few minutes.

What information do you need to ask for on the form?

There is a lot of paperwork and documents that need to be collected for the onboarding process to run smoothly. However, by being prepared and knowing which documents you need ahead of time, you can make the onboarding process much easier.

The following are some common documents you’ll require to collect for your onboarding process:

  • The ID of every employee of their business, such as a passport or driver’s license.
  • Depending on the type of business they operate, you may also need proof of address and registration documents (such as certificates of incorporation, LLP agreements, or registration certificates).
  • Tax returns on income.
  • Bank Statements.

By having this information upfront, you can streamline the onboarding process and create a great first impression with your clients.

Why is important to have a great merchant onboarding process?

Creating an effective merchant onboarding process is important for any business that wants to succeed. By following the best practices for proper merchant onboarding, businesses can ensure that they are providing the best possible experience for their customers.

Also, as we have mentioned before, it is important that we have all the necessary information to verify the business’s legitimacy to ensure a smooth and legally compliant merchant onboarding process and avoid all kinds of fraud. The best way to create a merchant onboarding form is by using a tool like File Request Pro, which makes it easy to collect all the necessary information from merchants.

With a great merchant onboarding process in place, businesses can improve customer satisfaction and retention rates, as well as save time and money. Do you have a merchant onboarding process in place at your business? If not, what are you waiting for?