For Independent Software Vendors (ISVs), the service that a payment partner provides reflects on the ISV's software business.
This includes functions such as payment processing and serving up transaction data and analytics, but the first touchpoint a merchant has with a payment service is generally during the process of applying for a Merchant Processing Account. Boarding with a payment provider requires that the merchant submits business-related data and documents to the provider, who performs a thorough review before approving or declining the merchant for processing credit card transactions.

There are many ways that this complex process can create friction between an ISV and its new merchant clients. Clients who are ready to deploy an ISV’s software and begin accepting payments may lose patience with a slow and tedious process to set up their merchant payment account.
Compliance regulations are only becoming more strict as the potential for payment fraud increases with the growth of the digital economy. Since the process to onboard merchants with a payment company is expected to remain lengthy and rigorous, ISVs will benefit by working with a partner that has streamlined this process for maximum efficiency.
The Merchant Onboarding Process
When an ISV’s new clients sign a contract to process payments through the payment gateway or processor, the merchant onboarding process begins. This is different from when ISVs board clients onto their own POS app, which typically involves ensuring software users understand how to work with the product. Instead, it’s more accurate to think of boarding with a payment partner as a risk assessment. During this process, payment companies analyze financial and business-related data (some required by law) to ensure the business being boarded is legitimate.
Merchant onboarding includes everything described in the sections below.
- Merchant Application Review: Merchants start the onboarding process by collecting merchant data through a Merchant Processing Application. Payment processing companies review merchant account applications to screen applicants and ensure everything appears to be in order before investing time in the steps that follow. Successfully completing the application process results in the payment processor issuing a MID (Merchant ID) that is unique to the merchant.
- Identity Verification: The U.S. enacted Know Your Customer (KYC) requirements in the 1990s, and further strengthened them as a part of the Patriot Act in the early 2000s. KYC puts safeguards in place to prevent fraud, money laundering, and identity theft. To comply, payment companies must collect information such as the merchant’s business documentation, address, banking information, and owner or leadership identity verification.
- Merchant History Review: Due diligence requires that a payment service provider investigates the business’s (and owner’s) credit history. This phase of onboarding also includes reviewing past transactions to look for signs of fraud or other illegal activity.
- Additional Steps for High-risk Merchants: If a payment company determines the business is high-risk, it may analyze the business’s digital presence to confirm that no illegal activity is taking place.
- Data Security: If the outcome of all reviews and analyses is favorable, the merchant must then prove its systems and processes comply with regulations, including those of the Payment Card Industry (PCI).
Because the process is so complex and is bound by stringent requirements, ISVs benefit significantly by partnering with a payment service provider who has the tools and systems in place to automate this otherwise lengthy and error-prone manual process. North's Merchant Boarding API provides a simplified boarding flow which includes a pre-built dashboard for merchants and ISVs to manage boarding applications, as well as a custom boarding flow which enables ISVs to build out their own dashboards and flows.
What is automated onboarding?
Completing the onboarding process manually can introduce human error and is typically very time-consuming, which increases costs for everyone involved, and creates delays and frustration for the merchant. The challenge that ISVs face is to find a payment partner who has improved on traditional merchant onboarding by finding the right mix of due diligence and digital methods to complete the process quickly.
An effective merchant onboarding solution will leverage APIs which allow merchants to apply and submit supporting documentation online, and receive real-time confirmation that the payment processor has begun their assessment. Automated onboarding using a merchant onboarding API enables the payment provider to verify merchant data against online databases, which further reduces the time required to board.
Onboarding APIs Easily Integrate with ISVs' Systems
One of the greatest benefits of partnering with a payment provider who has a well-designed, automated boarding process is that ISVs can easily integrate it into their existing systems. For ISVs that don’t have an existing merchant portal, the best payment partners will provide a way for merchants to self-serve during the onboarding process and submit their own Merchant Processing Application data. They may also provide a portal for ISV Sales Agents to manage merchant applications and view details about their portfolio.
Click through the interactive visualizer below to view details about North's Merchant Boarding API calls that are used in the Simplified Enrollment flow.
Submit a completed application to Underwriting for review.
On the other hand, some ISVs already have a merchant portal and simply want to collect and submit the required merchant onboarding data to their payment partner. In these cases, they should look for a payment provider with the APIs and infrastructure that allows them to transmit data to and from ISVs’ custom portals, meaning the ISV can simply connect to the payment company from their existing ecosystem to facilitate a successful merchant onboarding experience.
Click through the interactive visualizer below to view details about North's Merchant Boarding API calls that are used in the Custom Enrollment flow.
Submit a completed application to Underwriting for review.
Benefits of Automated Onboarding
Automating the merchant onboarding process creates a quicker and easier experience for the merchant, and it also has other advantages.
- Managing merchant applications and supporting documentation is easier and leads to fewer delays due to instant data transmission.
- Digital-native business owners are accustomed to electronic processes, so automated onboarding aligns with the way they do business.
- Fewer data entry errors are introduced compared to paper-based applications.
- Streamlined, intuitive digital processes create good experiences for the merchant and lay the foundation for a positive, long-term business relationship.
Overall, automated merchant onboarding is more efficient and less of a burden on merchants and the ISV businesses that support users throughout the process. Faster, more straightforward merchant boarding processes enable merchants to open a merchant account and start credit card processing sooner than they would with a payment company that uses traditional merchant onboarding processes. Learn how automotive ISV 1st Mile leveraged automated onboarding with the Merchant Boarding API to upgrade their manual boarding process from taking days or weeks, to a matter of minutes.
How To Get Started
Contact us to learn more about automated processes that make life easier for clients and reflect positively on ISV businesses.