Merchant Onboarding is the Key to Revenue Retention

Over the past ten years, traditional merchant acquirers have seen new entrants transform the way merchants access payment processing. Aggregators like Square, Stripe, and Paypal have set a new expectation among many merchants, revolutionizing the speed and ease of the merchant onboarding experience. Although aggregators have their pros and cons, they offer a stark contrast to the days when merchants had to onerously fax reams of documents and then go through a weeks-long underwriting and account set-up period to begin accepting card payments.

These days, merchants – like all B2B customers – expect more from their payment processor – more dedicated support that makes the client feel appreciated; more insight into their needs that makes the client feel understood; and a way of doing business that makes clients’ lives easier. However, there remains a gap between customers’ expectations and reality when it comes to experience. In fact, in North Highland-sponsored research, only 16 percent of financial services business customers reported that they always receive a consistent and cohesive onboarding experience, and 40 percent of them cited service or support quality and/or timeliness as the most common issue during the B2B onboarding period.

On average, annual merchant attrition rates can exceed 20 percent, and in our firsthand work with clients, it’s not uncommon to see merchant acquirers lose a double-digit percentage of their customers before they ever process the first transaction—only to lose an even higher percentage within the 6-12 months after going live. For high-growth areas in the merchant acquiring market, including e-commerce, mobile payments, and integrated software vendors, this picture can be even worse. Many traditional merchant acquirers have trouble attracting the customers in these segments in the first place because they haven’t designed their systems and processes to make it easy for them to join.

As the saying goes, you only get one chance to make a first impression: in merchant processing, this is the onboarding experience.

Throughout the course of our work with many of the largest payment processors, we have seen some consistent themes that contribute to a negative customer experience:

  1. Reactive support: When a customer is being onboarded, some processors wait for merchants to call them with their problems. Processors should be checking in at key points in the customer journey, such as during any certification process, at go-live, at first statement, and during PCI certification. Proactively addressing known pain points in the journey makes a big difference with customers.
  2. Unclear or unseen communications: In this day and age, communications need to be engaging, simple, multi-channel—and, most importantly, relevant to the audience. You can’t rely on sending a long, wordy email (or heaven forbid, a letter) to the address on file. Standard communications need to be visual and simple. Convey only the necessary information with graphics that catch the eye.
  3. Lack of automation: We find that many processors still have manual processes as part of their account application and set-up – in many cases requiring the same information to be entered into multiple systems by hand. This delays set-up and creates errors that can negatively impact the customer experience down the road. While some of these issues stem from legacy siloed system architectures, many of these issues can often be resolved with digital applications, greater integration, automated workflow tools, and process redesign.
  4. Lack of billing transparency: Merchant statements can be overly complex and often contain “surprises” in the form of unanticipated fees. It is important for processors to be transparent about these fees up front (not just in the fine print of a merchant services agreement). Best practices include “easy-to-read” statement design and a statement guide that explains statement layout and key definitions. In addition to including this guide with the first several statements and on the website or merchant portal, some processors have begun proactively reaching out to new merchants on a first statement cycle to offer a “walk-through” of the statement. This relatively inexpensive step lends a “high-touch” feel to what can otherwise be the biggest pain point in the onboarding experience.
  5. Broken organizational “hand-offs”: New merchant clients often are passed from sales to an onboarding team, and then to a contact center over the course of the first few weeks or months of the relationship, but the hand-offs often are not orchestrated well. When customers do not know who to call or find that the high-touch experience they had during the sales process has evaporated, they can feel abandoned or even duped.  These hand-offs should be designed in detail by the processors to ensure that merchant expectations are established and met. It is important to document the process, train relevant employees on the process, communicate the process to merchants at the beginning of the onboarding process, and monitor compliance of the customer-facing teams.

In creating improved experiences, where should acquirers get started?


  1. Align on strategy: Everyone likes to say that they are customer-centric, but is the organization truly dedicated to this strategy? How does the organization really want to differentiate itself in the market? If customer experience isn’t the primary differentiator, how much improvement in the experience is enough?
  2. Assess: It is important to understand your desired customer journey and identify the gaps within the current experience. What do your customers really care about, and what are their unmet needs? (Hint: some of the answers will surprise you). While focused surveys, interviews, and focus groups can all inform this, analysis of contact center data can also be one of the most telling sources of insight.
  3. Prioritize and Ideate: Once you have identified the gaps, document the relevant impact of those gaps and use this to prioritize opportunities for improvement. Work with a cross-functional team to ideate ideas for filling the highest priority gaps, creating a backlog of improvement opportunities.
  4. Design, Iterate, Pilot, and Implement: Service design techniques can help to systematically lay out all the pieces that need to be put in place across the organization to realize the future merchant onboarding experience. Leveraging agile ways of working is an effective way of working quickly through initial opportunities, piloting, and reprioritizing remaining opportunities. Make sure that you are measuring success along the way to understand progress and to help with future investment decisions.

While fixing a sub-par onboarding experience takes investment of time and money, it is well worth it, and doesn’t take long to start seeing results.

For more, see our white paper: “Cashing in on the Hidden Value of Onboarding.”