The Smart Money Is Learning to Love Merchant Complexity

Watch more: Need to Know With Maverick Payments’ Barry Prentice

Underwriting serves as a safeguard against financial, operational and regulatory exposure, yet it can also become a bottleneck when businesses don’t fit neatly into established categories. That tension is becoming more pronounced as merchants adopt new business models, operate across multiple channels and navigate increasingly complex regulatory requirements.

Barry Prentice, vice president of risk and underwriting at Maverick Payments, told PYMNTS in a recent interview that the traditional approach to underwriting was largely built around limiting exposure through fixed frameworks and standardized assessments. While effective in many cases, those models were designed for a marketplace that was considerably less diverse than the one payment providers face today.

“Historically, risk and underwriting really focused on limiting exposure rather than understanding it,” Prentice said. “Modern businesses have evolved, and they’re much more diverse today than they were.”

The consequence, he said, is that conventional underwriting processes can overlook viable opportunities. When underwriting relies heavily on rigid rules, standard merchant classifications and historical assumptions, businesses that fall outside familiar categories can be rejected before their operating models are fully understood.

That issue matters particularly for independent sales organizations (ISOs), whose success often depends on their ability to serve merchants across a broad range of industries. As new categories emerge and existing industries evolve, ISOs are encountering businesses whose complexity requires deeper evaluation rather than automatic exclusion.

Complexity Requires Context

Prentice believes underwriting is gradually moving toward a more nuanced model.

Instead of focusing primarily on what makes a merchant different, modern underwriting seeks to understand how the business operates, how revenue is generated, and how regulatory obligations are managed. The objective is to make better-informed decisions.

“Modern underwriting solutions really focus on understanding,” Prentice said. “It’s about identifying unique opportunities and pursuing those to find a path forward.”

For ISOs, that shift can expand the range of merchants they are able to pursue. Payment providers that possess experience across multiple risk categories can evaluate opportunities that might otherwise be routed elsewhere or declined outright.

Prentice noted that managing portfolios containing high-risk, moderate-risk and low-risk merchants requires both expertise and infrastructure. Experienced underwriting teams are better positioned to distinguish between genuinely problematic businesses and those that simply require additional review. Consistent processes across departments also help ensure that decisions remain disciplined while accommodating a wider range of merchant profiles.

The result is a more flexible operating environment for ISOs. Rather than maintaining separate relationships and workflows for different merchant categories, they can work within a single framework capable of evaluating a broad spectrum of opportunities.

That approach can be particularly valuable in sectors that carry additional compliance requirements. Prentice pointed to examples such as money services businesses and online pharmacies. These categories are often viewed through a high-risk lens, but he said many of the challenges stem from regulatory complexity rather than elevated financial risk. Understanding the rules governing those businesses is often more important than relying on broad assumptions.

Keeping pace with changing regulations therefore becomes a central part of the underwriting function.

“Having your finger on the pulse of what the regulations are and what’s changing is extremely important,” Prentice told PYMNTS, “so that you know how to handle these merchants when they come through the door.”

The broader implication is that underwriting is becoming less about filtering out complexity and more about interpreting it correctly. For ISOs, that can translate into access to new markets, stronger merchant relationships and a larger pool of opportunities.

Prentice said the greatest value emerges when underwriting, risk management and merchant support operate within a unified structure.

“The opportunity to be able to submit a full spectrum of risk levels to one full-service payment provider really is a huge benefit,” he said.

As merchant models continue to evolve, underwriting will remain a discipline grounded in caution and control. Yet the providers that can pair those principles with deeper understanding may be best positioned to help ISOs convert complexity into opportunity.