How payment technology and software transformed Merchant Onboarding?

The merchant onboarding industry is growing worldwide, and things have changed drastically after the COVID-19 pandemic. Today, people have become well accustomed to online shopping. According to reports, around 54% of internet users purchase something online at least once a week. On the other hand, another report suggests that the e-commerce sector has grown by 27.6% from 2020 to 2021 worldwide. 

In such a scenario, ecommerce marketplaces seek more merchants to grow bigger and reach more buyers. However, merchant onboarding has remained a significant challenge in this process for ecommerce marketplaces. The ecommerce platforms need to verify a merchant before onboarding. Physical verification is time-consuming, and ecommerce businesses need to recruit a large number of verification agents for this purpose. 

The Challenges of Merchant Onboarding 

Payment service providers have to face multiple challenges in merchant onboarding. For example, payment gateway providers must meet regulatory terms and conditions. Meeting such terms and conditions becomes even more complicated when onboarding international merchants. 

Verifying the merchants by visiting them physically is also challenging. The payment services have to recruit and train field officers. Moreover, the manual process is never accurate, and compliance errors often occur. In such cases, ecommerce businesses face financial penalties due to compliance violations. 

The Benefits of Software in Transforming Merchant Onboarding 

Using merchant onboarding software can revolutionize ecommerce marketplaces in many ways. The following section will outline the benefits of the digital merchant onboarding process. 

• Time-Saving: A digitized process can save you time significantly. You can reduce the hassles of dealing with expensive paperwork. Therefore, an ecommerce platform can add more merchants easily in a short period. On the other hand, merchants can find minimal hassles during the onboarding process. 

• Accuracy: Managing payment compliance is complicated, and many businesses struggle with this stage of merchant onboarding. You can reduce such hassles through digital onboarding, which assures top-notch accuracy. The chance of error is zero in an automated merchant onboard managed by the software. 
  
  
• Competitive Edge: The ecommerce marketplaces can enjoy a competitive edge over their rivals through digital merchant onboarding. A faster and hassle-free onboarding makes the merchants happy. As a result, they find such platforms trustworthy for selling their products or services. As a result, the ecommerce marketplace can grow quickly by adding more merchants. 
  
  
• Happy Merchants: The cutting-edge merchant onboarding solutions bring satisfaction to the merchants. Happy merchants remain loyal to an ecommerce marketplace. Nevertheless, they want to grow their businesses on platforms that offer cutting-edge facilities. Therefore, merchants can ensure a more satisfactory experience for their buyers on ecommerce platforms. 

Advanced Payment Technology to Change the Merchant Onboarding Landscape 

Digital payment has become the most convenient payment mode for the ecommerce industry. However, the merchants have to link their bank accounts during onboarding, while the ecommerce platforms need to verify a merchant's banking details and associated data for the safety of buyers. 

Today, cutting-edge payment technology has changed the digital landscape to a significant extent. A business can proliferate by adopting digital payment gateways. On the other hand, merchants can quickly offer refunds and compensation to buyers through digital payment platforms. 

Payment companies have adopted a faster merchant onboarding process by implementing advanced software. The benefits of using such tools have been discussed in the following section. 

1. Payment Services Can Scale Things

The digital merchant onboarding process helps the payment services scale things according to their requirements to match the state-imposed compliance policies. Hiring underwriters and administrative personnel for merchant verification is not a sustainable ecommerce business model. Many ecommerce businesses invest a large portion of their revenue in paying the salaries of administrative personnel. 

The digitalized system will help you to scale the number of employees for merchant onboarding verification. In addition, since the process will happen online through an automated system, ecommerce marketplaces can reduce their expenses on hiring administrative staff. 

2. Enhance the Sales Output for Your Business

Traditionally, the sales team of an ecommerce business has to deal with complex onboarding tasks. Since they devote more time to customer onboarding, they cannot focus on sales and advertising. As a result, productivity in branding is drastically reduced for ecommerce marketplaces. 

A digitalized process can reduce the hassles for your sales team. Instead of focusing on the complex merchant onboarding for digital payments, the sales team can devote time to product branding and advertising strategies. As a result, your ecommerce business can reach more vendors, investors, and buyers. 

3. Underwriting Optimization

Underwriting is a common problem for payment services and ecommerce platforms. You may get a suspiciously low number of merchants due to underwriting. On the other hand, at times, the onboarding rate is suspiciously high and suggests a problem with the sales team. 

Dealing with mismanagement scenarios can become easier with a digital merchant onboarding solution. This is because merchants with high-risk scores will be automatically rejected by the system, while those with low-risk scores will find a faster approval process. In other words, the digitalized system reduces compliance mismanagement chances for your business. 

4. Enjoy a Higher Merchant Referral

Most ecommerce platforms and payment services introduce referral programs to find more merchants. The existing merchants will find more merchants for you if your ecommerce platform offers a few benefits for referrals. 

The referrals will increase if the merchant has a hassle-free onboarding experience. Conversely, a poor experience during the onboarding process will create a poor impression of your business. Therefore, merchants will not find the motivation to refer your ecommerce platform to other merchants. As a result, referrals help ecommerce businesses and payment services grow more quickly. 

Conclusion 

Merchant onboarding has always remained complex for the ecommerce business and payment services. But, there is no more big trouble with the introduction of digitalized systems. The payment services can provide faster and more satisfactory merchant onboarding services to their ecommerce partners.