Merchant Onboarding: How It Works and What You Need to Know

What is Merchant Onboarding?

Merchant onboarding involves integrating your business with a payment service provider (PSP) or payment gateway. It is about setting up your business to securely and effectively manage customer payments. This process directly impacts operational efficiency, customer experience, and risk management.

Merchant Onboarding Process

The process typically involves submitting necessary documents, identity verification, a review of financial health, and compliance checks to ensure the business is legitimate and can handle transactions securely and efficiently.

Necessary Documentation

Have the following documentation ready pre-onboarding:

• Tax identification numbers
• Financial Statements
• Business registration documents
• Ownership information
• Bank account details
• Licenses and permits
• Payment processing history
• Website and online presence

Understanding KYC and KYB

‘Know Your Customer’ (KYC) and ‘Know Your Business’ (KYB) are crucial for merchants and businesses to confirm the identities of their customers and business partners. Verification helps comply with regulations, minimise fraud risks, and boost trust and safety in business dealings.

• KYC requires verifying customer identities to prevent money laundering and terrorism financing, ensuring businesses comply with regulations, monitor financial transactions, and deter fraud.
• KYB, the business-focused equivalent of KYC, centres on confirming business identities and evaluating risks in business relationships. It mandates companies to verify business legitimacy, identify owners, and comply with AML (anti-money laundering) regulations.

Step-by-Step

When you have your documentation prepared and you have selected a payments solution that best suits your business, the general onboarding process goes like this: 

1. Submit merchant application to be reviewed by a PSP or payment gateway 
2. Undergo compliance, risk and due diligence checks by the PSP 
3. Set up your account and connect to PSP networks once approved

Getting Started With Rapyd

Once you have created an account in the Rapyd Client Portal you can begin the verification and onboarding process. Getting started with Rapyd includes steps like: 

1. Identifying the product solution(s) you are interested in. This includes collecting payments, managing multiple wallets, issuing cards, sending payouts and more.
2. Providing information regarding your business revenue and processing operations. 
3. Verifying your account and completing KYB applications. 
4. Setting up bank accounts and additional administrative preferences.