The Indian economy has seen a massive increase in the number of small businesses in recent years. This growth has been powered by the quick and efficient onboarding of merchants. The digital transformation has changed the way people buy and sell their products and services.
Many businesses have shifted to digital tools in order to offer seamless and effective services to their customers. The widespread adoption of the internet has made the payment aggregators go through different ways to make their payment gateways stand out from the rest. One of the key points of this is merchant onboarding.
What is merchant onboarding?
The process of adding new merchants to the already exciting platform is called merchant onboarding. The traditional methods of onboarding involve tedious paperwork and a lot of in-person interaction with merchants which makes it hectic for both merchants and payment aggregators.
Due to the pandemic, many businesses have gone digital and are now onboarding huge numbers of merchants to churn out positive business results. The merchant onboarding process is more efficient and easy to manage compared to other business strategies.
Steps to onboard merchant:
1) KYC document Check
The first step of merchant onboarding is KYC document review or the Check for Customer Due Diligence Check. We generally verify your identity by obtaining a Valid Document and an individual PAN verification and, if required, the current address proof checks.
Methods for verifying documents are also different, as is the physical check that is the norm. Digital reviews, API-based authentication, and Digital KYC and Video KYC procedures are introduced to simplify the process and replace old physical statements.
2) Verification of the Document
It is important to confirm these list checks, greylists/blocklists/defaulter lists of directors. These checks assist in fighting the financing of risk and money laundering and help determine the level of risk for a specific client.
The next step is to conduct an antecedent and background check that takes the shape of an initial screen and is the basis for defining an internal Merchant Onboarding Policy. This screening aims to confirm the intent, character, and legitimacy of a prospective client's company.
3) Profile of the merchant
Following these initial checks, merchants are categorised as high/medium/low risk. It determines the level of diligence and the amount of monitoring post-onboarding.
After onboarding, due diligence checks will constantly monitor any changes in the merchant's behaviour that could cause concern. It could also require a review of risk profiles for merchants and a level of due diligence.
4) Flow monitoring
One of the essential things is monitoring transactions by merchants to identify any red flags that could be present, as the characteristics of transactions are not expected to be as they should. It can include the expected total volume of transactions, the average amount of an order, the frequency of chargebacks or any other.
5) Keep track of records
Maintaining the records of all transactions with merchants and identity documents must be made available to authorities on demand, for example, in the event of an investigation. Numerous internal governance requirements ensure proper compliance with the law, including designated internal committees and internal audits, periodic risk assessments, and appropriate employee training.
6) Timely Updates
Finally, make sure to update risk profiles for merchants and KYC frequently. By the law, keep track of the changes to merchant KYC at least every ten years. Continuous due diligence checks assist in this.
Why must you choose Taskmo as your merchant partner?
Taskmo offers an easy onboarding process with the help of seamless API integration where businesses can easily onboard merchants within no time. The security and transparency make taskmo a reliable onboarding partner. The merchant onboarding process can be tailored as per the business requirements, and give assured success rates, faster onboarding rate and dynamic business opportunities.
With more than 500+ brands, Taskmo is rich with a robust analytical system making it the one-stop solution for all onboardings.
Have a query? Get in touch with us at www.taskmo.com
Merchant onboarding is the key to growth for any kind of business, regardless of the fact if you’re a merchant acquirer, a payment service provider, or anyone else.
As a business, you would want to have as many merchants to support more transactions.
But, onboarding more merchants without proper due diligence can cause more losses than benefits.
Businesses need to follow the best practices in merchant onboarding and monitoring practices.Source URL: https://diro.io/best-practices-for-merchant-onboarding-and-monitoring/
