What if my Representment is Incorrectly Declined?
April 10, 2024
And what if a successful RDR or Ethoca submission gets charged back? Read on This blog breaks down the next steps.
Is Continuous Underwriting Possible?
A Merchant may have everything, from a great product and demand, to a gateway and POS, but without a Merchant Account, they won’t be able to process transactions. And getting a Merchant Account is more involved than signing up for a personal bank account. That Merchant needs to be underwritten and onboarded, which can be slow and resource-heavy for everyone involved.
The Current State of Underwriting Merchants
Typical underwriting is done in a single effort. The Merchant makes their case for receiving a Merchant account. Then the Processor performs both their due diligence and assesses risk profiles. They look at the Merchant’s business registration documents, business plans and financial projections, management structure, financials, products/services offered, transaction volume, payment methods, chargebacks history, compliance documentation and other relevant licenses/certifications. Underwriting is critical for Processors. They want to mitigate risk, limit financial loss and protect their own compliance thresholds.
Underwriting is time consuming and expensive, and once the Merchant is underwritten, they now need to be Onboarded. Onboarding can be another long, resource heavy process of reviewing compliance requirements, risk management policies and underwriting criteria with the Merchant. Ensuring everything works optimally and the Merchant fully understands their compliance thresholds can decrease risk.
7 Steps to Onboarding
- Negotiate the Price and Contract — Onboarding Merchants starts by reviewing, negotiating and signing paperwork. There is no point in going further if both Processor and the Merchant aren’t on the same page
- Technical Integration — Next, the Merchant’s POS, website and/or gateway is connected to the Processor’s payment system. This step may also involve obtaining API keys and credentials, configuring check out pages and testing transactions in a development environment
- Documentation and Compliance — Staying compliant is critical for both Processors and Merchants. Onboarding includes sitting down with the Processor to review regulations and compliance
- Testing in a Live Environment — Once the Merchant is integrated and live, transactions need to be tested. Live testing can include testing the gateway, real transactions, end-to-end verification, manual transactions and fraud management systems
- Account Activation — At this point, the Merchant’s account is formally activated. They are finally ready to take payments!
After Underwriting and Onboarding, the Merchant is Now on Their Own…
Merchants can now receive payments, scale up operations, change product/service offerings and more. But Acquiring banks don’t always have the manpower to monitor every single payment or watch Merchant trends. Banks get involved once compliance issues arise. And at that point, salvaging the merchant’s health can be considered a lost cause.
Shifting to Continuous Oversight
When Merchants stay healthier for longer, everyone upstream benefits. The burn-and-churn of Merchants being dropped months after being enrolled, doesn’t need to be just another cost of doing business.
Continuous underwriting is the process of monitoring and reevaluating your entire Merchant exposure, down to the exact transaction ID, product and service, etc., in a continuous pattern. By eliminating one-time episodic over-sight and keeping risk assessment always on; Processors can identify payment issues early and address them before they become a problem.
The future of underwriting Merchants moves away from the standard, quarterly, yearly, or sometimes even bi-yearly compliance raids. Instead, it’s continually monitoring, reporting and addressing red flags. It’s actively keeping your Merchants healthier for up to 2x or longer.
Make Continuous Underwriting Possible
Slyce360 acts as a force multiplier for your Risk Department, meaning that Acquirers can up to 2x their Merchants’ lifespan. It integrates with your Merchants’ CRM data and runs 24/7 behind the scenes. Set custom alerts and catch rising issues early. Then run reports, see the exact problem transactions and generate actionable insights for Merchants to follow.
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