Speed in merchant onboarding is crucial for Payment Service Providers (PSPs) to reduce churn, gain competitive advantage, and capture more business through AI-enabled automation.
In today’s fast-paced payments landscape, speed is crucial, especially when it comes to merchant onboarding. As Payment Service Providers (PSPs) compete for new clients, the time it takes to onboard merchants has become a critical factor in determining success. Slow and cumbersome onboarding processes not only frustrate merchants but also lead to high prospect churn, costing PSPs valuable business.
According to McKinsey, nearly 30-35% of merchants abandon the onboarding process when it takes too long (McKinsey & Company). For many merchants, especially those in fast-moving industries or micro-merchants looking to get up and running quickly, days-long waits for approvals are unacceptable. PSPs that can onboard merchants quickly—combining automation with human oversight—gain a clear competitive edge.
A Mastercard study found that using AI-enabled KYB systems can reduce onboarding times from days to just minutes (Mastercard Services). While automation accelerates processing, it’s the ability to enrich data and provide insights to human reviewers that ensures onboarding is both fast and accurate.
The speed of onboarding is directly tied to prospect churn, where merchants abandon the process due to delays and lack of transparency. Deloitte research emphasizes that onboarding inefficiencies can lead to significant missed revenue opportunities as merchants move to competitors with faster systems.
By streamlining repetitive tasks, AI helps reduce onboarding times, but it’s the combination of automated systems and manual review for high-risk cases that ensures both speed and thoroughness. This approach not only retains merchants but also widens the sales funnel, enabling PSPs to capture more prospects without overwhelming compliance teams.
While AI-enabled KYB systems play a crucial role in automating routine tasks, the real value comes from combining automation with human expertise. AI processes large volumes of data, identifying low-risk applications that can be approved quickly, while flagging higher-risk cases for underwriter review. This allows PSPs to onboard merchants quickly without sacrificing security (Mastercard Services).
Rather than replacing human decision-makers, AI enriches data and provides insights that help underwriters make faster, more informed decisions. As McKinsey highlights, AI-supported onboarding not only improves speed but also strengthens decision-making by reducing manual errors (McKinsey & Company).
In a competitive marketplace, speed is no longer a luxury—it’s a necessity. As McKinsey points out, slow onboarding processes can cause PSPs to lose up to 35% of potential merchants(McKinsey & Company). By implementing AI-enabled KYB systems that automate repetitive tasks while enriching data for human decision-makers, PSPs can dramatically cut onboarding times, reduce churn, and scale their operations effectively.
To continue learning about how AI can enhance both security and speed, check out our next blog: “Balancing Security and Efficiency: The Role of AI in KYB”.
Request a demo today to see how Gratify can accelerate your operations and deliver faster, more secure merchant onboarding.
