Digital Payments

The Merciless Conflict Within Merchant Onboarding

Cake: It’s that thing one can supposedly have as long as they don’t take a fork (or their fingers) and try to put some into their mouth. Otherwise, the universe will explode — or something like that. At least, that is what the great philosophers of contradiction, irony and gloom keep saying.

In the payments world, cake is there for possession and taste-bud joy — assuming the merchant service provider (MSP), or independent sales organization (ISO), strikes the right balance between efficient onboarding and robust offerings. At least, that’s the underlying message of a recent PYMNTS digital discussion, featuring Karen Webster and Agreement Express CEO Mike Gardner, about “Ditching Merchant Abandonment and Attrition.”

10-Minute Rule

Here’s a basic, but never-to-forget, rule of thumb to remember: If the onboarding/application process takes more than 10 minutes, many merchants are going to bail. It’s not just the time, but clarity that counts: Like the people who conduct telephone or internet surveys, merchant payment providers need to tell potential clients straight up how long a particular application might take. A little bit of clarity goes a long way to encourage patience and participation.

“If you start off by telling people how long this is going to take, you’ll get an immediate bump,” Gardner told Webster during the hour-long discussion and slide presentation. Sure, some applicants might not be able to complete even a simple onboarding process during that stated time (not everyone types quickly, after all), but setting that expectation right away can pay off.

“Even if you set up the expectation that it will take 20 minutes, that’s better than setting no expectation at all,” he said.

Stats employed during the PYMNTS webinar back up that point. Gardner said that if a merchant knows the application process will take 10 minutes or less, that leads to 21 percent more of them — the merchants — beginning that process. That time limit, along with information for the potential client of the expected length, also leads to a 45-percent gain in application completions.

“That’s a stunning increase for very little effort,” Gardner said. “But you have to deliver.”

Product Variety

ISOs have to deliver amid increasingly fierce competition to provide cutting-edge payment services — and a variety of those services — to merchant clients. That’s where the cake-eating challenge really starts to get interesting, and where MSPs can stand out and shine.

Here’s another rule of thumb from the PYMNTS digital discussion: Two or more products increase client stickiness for those service providers, with Gardner saying that ISOs can experience a 60 percent rise in “attraction when you have [more] to offer.”

However, balance plays a big role here. Offering too many products and services — or, even more specifically, offering those options in a way that is disorganized or otherwise sloppy — can make onboarding so complex and time-consuming that it drives away potential clients. Don’t forget, those clients are also consumers and, like the rest of us, they are used to online retail transactions that are becoming ever more friction-free. One can bet they have those same expectations in their professional lives.

“I don’t want to go through and buy one product at a time” is how Gardner put it.

Bundling products and services is a good way to go, especially if the service provider can create client “personas” that result in product packages designed for a particular segment. That not only creates solid offerings (price-comparison shopping in the ISO world can be a virtually impossible task, at least on an apples-to-apples level), but translates into simpler applications and onboarding.

During the webinar, Gardner showed an example of an invitation to a client that included multiple links to potential products and services (opening the door, perhaps, to the paradox of the choice problem, the sense a person can get of being overwhelmed when faced with too many options), and a similar letter with one link straight to the application.

Differentiation And Flexibility

Having “robustness” in product offerings can help MSPs “differentiate” themselves, Gardner said. Typically, he added, merchants want to sign up for three to five product offerings, which means, of course, that service providers need more than that. No doubt, other offerings will be added as technology and other areas develop.

Being able to offer new products in a simple way requires a flexible approach. For instance, instead of some home-crafted website that requires significant work to revise and expand when that time comes, it is better to have a professional site that can be easily updated with fresh products, which can then help to keep onboarding simple.

Offering fresh products, and making a potential client feel as though it is — or the bundles are — tailor-made, can do much to boost revenue. Gardner said, “Customer retention is so much stronger when I have a feeling that you have made something special for me.”

So, yes, MSPs can have their cake and eat it, too, proving generations of gloomy thinkers wrong — at least, according to what Gardner said during the webinar. However, achieving such a goal requires constant effort.

“You have to be thinking forward all the time, because this is the new norm,” he said.



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.