Banks and payment service providers face increasing competition today in onboarding new merchants. For many of them, the merchant onboarding process is very time-consuming, inflexible and costly.

From a merchant perspective, however, the competition among banks and payment service providers is welcome. There are a range of competitors providing faster, less complex and lower cost solutions.

In the midst of this competitive landscape, savvy banks and payment service providers are taking the time to rethink their business operations in order to deliver a better customer experience.  

I see five key areas that banks and payment services companies should concentrate on to improve and transform their businesses.

The first area is documentation. While your market facing team approaches merchants with your solutions, make sure that you are collecting all the required documentation. Having all the necessary documents in place will ensure that underwriting can be performed quickly. Back and forth interactions with the customer on documentation will only delay the onboarding process and cause customer dissatisfaction. Forward-thinking companies are also leveraging technology to empower merchant enabled boarding.

It's also important to automate underwriting. Increased automation in underwriting ensures that you will sail through the process seamlessly. Be certain to have all the essential checklists so that you are able to cover every point that is needed. It’s a good idea to have your teams perform both manual (selective) checks as well as automated checks while underwriting the file. Making underwriting guidelines available in digital form—or in the form of specific custom tools—is a big plus.

Also, merchant terminal configuration is vital. Be sure that you get things right by filling in the forms and the templates accurately the first time. Pay extra attention to any special merchant requirements for terminal configuration. Doing so will save a significant amount of time for your customers.

The fourth important issue is building scale and flexibility across operating teams. It pays to have support available when you need it. You don’t know when you are going to ramp up on volumes, but your response times to onboard new merchants need to be very competitive. Outsourcing can help achieve this goal: having a flexible team ready that can ramp up or down based on your needs is essential. Access to 24 hour a day/five days a week operations will give you an additional edge. Your processes will be that much faster than your competitors’.

Finally, create and maintain a knowledge base to better manage exception handling. Maintain a knowledge base that is available to the entire processing team so that it is easier to manage exception handling. Leveraging technology will make your onboarding process straightforward and more efficient.

Working with a mature, yet nimble business process management (BPM) service provider can help banks and payment service providers achieve these goals easily, and for less money. There are even some service providers that will offer short pilots to assess their capabilities before you need to commit to a longer termengagement.

Ramachandran Ariyur is Senior Vice-President, head of sales and Marketing at SLK Global.