Commerce Enrollment: Save Time, Make Money, Add Value

One of the challenges of providing an integrated payments software solution is activation.

For those not familiar with the vagaries of the payments industry, the process of being approved to process payments is lengthy and frequently confusing.  Typically, the experience involves either downloading or being e-mailed an application form.  This is filled out by hand* and then faxed back to the appropriate party.  Upon receipt, the information is keyed into a corporate system and a series of decisions are made based on information about the business.  This process is governed by a credit department as well as regulation (Know Your Customer, Patriot Act, etc). 

Not terribly overwhelming.  But the process simply takes too long.  In my experience with the industry, and in IP Commerce interaction with partners, I have seen this range from a week to 90 days.  In fact, when I first started working in payments it was one of the things that was hardest for me to grasp.  Having spent my previous life in various software markets (Enterprise Retail, Government, Tools) time to fulfillment was always of the greatest import.

But that isn’t how payments work today…

So what is the problem?  You will likely hear terms like:

  • Pre-cut Attrition – The number of applicants who simply fall out of the process between initiating an application and completion.
  • Time to Achievement – The delay between initiation of an application and actually being able to process payments.

The issue becomes even more severe when a business (particularly, a small business) wants to accept multiple payment types.  The process of filling out paperwork is the same…but now they have to duplicate information for each type of payment they desire to accept (i.e. Credit Card and ACH)

The impact of the above represents substantial revenue loss for all participants in the value chain.

For the Customer, they are making a decision about what payments they want to accept when they are presented with a tender.  i.e. Do you take X?  No…but I want to…now.  Waiting for up to 90 days is simply unacceptable.

For the Software Company, they don’t “own” the process of underwriting a customer account.  But since they provided the software they are squarely in the line of fire.  The customer frustration is usually directed at them instead of the party truly responsible.

For the Service Provider, (which in this scenario could be an ISO, Acquirer, Bank…basically whoever owns the merchant relationship) they lose money in processing fees and in pre-cut attrition.

What can be done?

I am pleased to announce Commerce Enrollment.

Commerce Enrollment solves for the complexity of payment underwriting by providing the Service Provider with an interface for data capture and, more importantly, decisioning**.  Building a series of web forms instead of a paper application is simple…Using the data that was captured to drive a decision making process (that is fully customizable) and present a document to the customer for electronic signature adds substantive value and is rather complex.  Data, in and of itself, has no value…Using that data to decrease time to achievement and minimize pre-cut attrition adds value to all participants.

Commerce Enrollment is a branded service that is fully hosted for IP Commerce*** Partners.  The process of implementing involves comparing what information is necessary to make an intelligent, appropriate underwriting decision, ensuring the information is collected, and tweaking the range of qualification checks available to anyone using Commerce Enrollment.

To be clear, IP Commerce does not perform the underwriting.  IP Commerce does not own, or co-own, the merchant relationship.  Rather we are the technology enabler to ensure a quick and simple application and approval process for the customers of our partners.

Simply, activating payments and completing the underwriting process is painful.  But, it shouldn’t be.  If I receive a .PDF file in an e-mail, I simply go and download the appropriate plug-in to view the file.  Payment activation should be similar.  Is there additional approval required?  Of course.  Should that approval require months of interaction through a combination of electronic and written mediums?  Absolutely not.

If you are interested in the additional features and benefits, I encourage you to dig a bit deeper.  Underwriting customers quickly provides unique value to customers and can provide a competitive differentiation in the market.  There is also an ROI calculator available to those curious about the impact on their bottom line.

If you have additional questions about Enrollment, or desire to discuss the “why and how” of the work IP Commerce has put into this product, please feel free to contact me.

What’s your perspective? Agree? Disagree? Anything to add? Critiques? The comment form is below. . .

* A problem for those like me who have forgotten how to use a traditional writing implement.
** An invented word, but one I happen to like.
*** This is a continuation of my discussion of innovation as reality, rather than theory.

October 20, 2008

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