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What is frictionless underwriting?

Businesses need to accept credit cards and digital payments in today’s fast-paced economy. While merchant services have become simpler and more affordable, the application process can be subject to delays, especially if acquiring banks or bank-sponsored merchant acquirers use manual underwriting procedures.

Thirty years ago, payment processing picked up speed when it evolved from paper receipts to electronic transactions. In a similar way, merchant applications became more agile and efficient when freed from paper-based formats. In a nutshell, frictionless underwriting replaces manual paper shuffling with lean, agile, fully digitized procedures.

A payment facilitator (PF) and technology provider, uses advanced automated technologies to remove friction from underwriting and customer onboarding to drive efficiency, security, and cost savings. Recognizing that time is of the essence and no merchant can afford to wait days or weeks for an approved merchant account, our frictionless underwriting process complements your technology suite, unlocking the following partner benefits:

Reduce onboarding delays

Before the age of payment facilitation, merchants faced more strenuous approval processes from participating acquirers and banks. The traditional underwriting model, still in use today, predates technology advancements and can take days or even weeks to onboard merchants.

Why subject customers and partners to weeks of waiting when a PF can help you underwrite a merchant in seconds? A PF checks and databases screen merchant application data and approve the account if no errors are found and no additional information is needed, instantly notifying merchants when they can begin processing payments.

Provide tailored, vertically-focused solutions

Another drawback of traditional underwriting is that acquirers tend to overlook a merchant’s size or industry, which can make the process more onerous for small and midsize businesses. For example, Mom-and-Pop stores can face the same rigorous vetting process as large enterprises processing millions in monthly revenue. This “one-size-fits-all” approach lumps applicants together instead of evaluating their individual assets, industries, and preferences.

A PF gets merchants up and running quickly without sacrificing quality or individualized attention. The automated online technologies combine technological know-how with a risk-based approach that is fully compliant with existing regulations and security standards. A PF understands that restaurants have different needs than healthcare providers and curate vertically-focused solutions while collecting data that is relevant to a merchant’s line of work, applying appropriate underwriting guidelines to applicants’ type and size of business.

Let software do the heavy lifting

Frictionless, risk-based underwriting will not completely do away with the human element but will promptly flag an incomplete application and save it from dreaded “pended” status. Flagged applications are assigned to human agents who can get to the heart of the matter by requesting missing details or initiating a more detailed review. This process combines best-in-class technology with human oversight.

Frictionless underwriting leverages technology to save time and money. Payment facilitators and their partners can use this tool to understand clients and minimize red tape. When combined with a robust technology framework, like VyaPay’s, frictionless underwriting is one of many tools designed to accelerate revenue streams and create better, faster business.