Who Are the Key Players in Merchant Onboarding

 

Knowing the key players and their roles will make the process go more smoothly

What is merchant onboarding? The merchant onboarding process is relatively easy to explain. The process occurs when a payment company sets up a business to manage and accept customer payments.

Why is merchant onboarding important? Going through the various steps helps to ensure the business’s efficiency, improve customers’ experience, and manage risks.

To ensure a successful onboarding experience, it helps to know the key players.

 

Key Onboarding Players

 

The key players in the merchant onboarding process are typically as follows:

Merchants

Merchants are businesses, retailers, or service providers that need to accept payments from customers. They establish relationships with payment service providers or payment gateways to facilitate transactions through various channels, such as online, in-store, or mobile payments.

 

Payment service providers

Payment service providers (PSPs) are companies that offer payment processing solutions for businesses. They handle the technical aspects of processing transactions, such as authorization, clearing, and settlement, and ensure compliance with industry regulations and standards. PSPs may also offer additional services, such as fraud detection and risk management.

 

Payment gateways

Payment gateways are the technology platforms that facilitate the secure transfer of transaction data between the business’s systems—such as their online store, point-of-sale (POS) system, or mobile app—and the PSP or acquiring bank. They are responsible for encrypting sensitive data, such as credit card information, and ensuring the secure transmission of this data during the transaction process.

 

Acquiring banks

Acquiring banks, also called “merchant acquirers,” are financial institutions that partner with PSPs to process and settle transactions on behalf of businesses. They are responsible for underwriting merchant accounts, assessing the risk associated with the business, and ensuring compliance with regulations.

 

Card networks

Card networks, such as Visa, Mastercard, American Express, and Discover, are organizations that establish the rules and standards for card transactions. They facilitate the communication and settlement of transactions between the acquiring bank and the issuing bank (the bank that issued the customer’s payment card).

 

Issuing banks

Issuing banks are financial institutions that issue payment cards—meaning credit, debit, or prepaid cards—to customers. They are responsible for authorizing transactions, ensuring the customer has sufficient funds or credit available, and ultimately transferring the funds to the acquiring bank.

 

Regulatory bodies

Regulatory authorities and industry bodies, such as the Payment Card Industry Security Standards Council (PCI SSC), establish and enforce regulations and standards that govern payment processing. They aim to protect customers and ensure the security and integrity of the payment ecosystem.

The players can vary by industry, but these are the ones you’ll most often include in your onboarding process.

 

Final Tips for a Successful Onboarding Process

 

Before starting the process, make sure you have the necessary documentation. This includes ownership and bank account information. You’ll also need business registration documents, financial statements, and any applicable business permits and licenses. You’ll also need the business’s online website, and projected revenue data. Some industries also require compliance documentation.

Having this information before starting the onboarding process will make it go more smoothly for everyone involved.