By Tom Byrnes
Once a sale is closed, the key to every successful ISO is the ability to onboard the new merchant and get them processing as quickly as possible. It's the lifeblood of every business, but what should be a routine, standardized process is frequently anything but smooth.
Onboarding is a complex process with a number of moving parts, but many ISOs still use a dated, hybrid approach that starts with a paper application getting scanned and emailed to the new account.
Since merchant sophistication varies widely, it's all too common to receive applications that are missing basic fields like a routing number, Federal ID tax number, or even the right Social Security number. That requires that someone—either in the office or the agent who signed the account—call the merchant back and track down the missing information so the application can be submitted.
While this works in smaller ISOs, because the problem is generally isolated and they easily can track a single email, larger organizations typically outsource support. They are managing a bigger team of external agents, and resolving a larger number of tickets creates a number of challenges.
Basic ticket management is often compounded by an inability to track ticket aging, extending both the time that an issue remains unresolved and the ability to get a merchant live and processing. Beyond creating a drain on an organization's efficiency, this has a direct impact on an ISO's ability to provide solid support to its accounts ,which can lead to reputational damage in the marketplace.
Both of these factors can have a direct impact on merchant satisfaction, leading to a higher percentage of account churn due to attrition. But that's just the front end of the process. Once a merchant application is complete, it moves into underwriting, and most ISOs have relationships with three or more processors to handle a spectrum of risk profiles. This frequently results in more questions to the merchant because each processor will have slightly different requirements or, in some cases, will require yet another application to be completed.
Underwriters also want bank statements, creating yet another "ask" to the merchant. But this is also far from a standard set of requirements. Some may want two months of statements, but would really take one, while others want to see a far greater set of documentation, such as three or more bank statements plus a copy of the merchant's business license.
While it takes time for an ISO to develop a solid understanding of each underwriter's idiosyncrasies and be able to anticipate their requirements to smooth out the process, it's natural for the merchant to view the whole process as disruptive and painful. One of the oldest adages in sales is "time kills deals," and merchants are not beyond dropping an agreement because it simply takes too long to be able do what they consider to be the "simple" act of running a transaction.
In an age of technological advances that have touched and improved operations in nearly every industry, ISOs have been left behind. What's needed is a standardized, digital approach that automates the onboarding process. Standardization simply streamlines onboarding and establishes an easy to complete, cloud-based application online would make updating information faster and easier for both the merchant, ISO and underwriter alike.
Taken a step further, creating a range of uniform underwriting requirements set by SIC code and/or risk profiles would allow a system to anticipate merchant requirements and auto-generate documentation requests in a more timely manner. Once underwriting is completed, the ability to predetermine whether an account needs only hardware or hardware and software, depending upon how they want to accept payments, would accelerate deployment phase.
When combined, this type of solution would empower ISOs to issue automated approvals with the ability to offer MIDs instantly, allowing merchants to begin processing the same day. It's a streamlined approach that ISOs don't simply need but deserve.
Tom Byrnes is vice president of marketing at LedgerPay. You can reach him by email at Tom.Byrnes@quisitive.com.
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