Square and other innovative Payment Service Processors are onboarding merchants faster and faster. In this Slideshare, find out how to onboard merchants faster without sacrificing smart risk decisions.

1. HOW TO WIN THE ONBOARDING RACE:
WHAT MERCHANT ACQUIRERS CAN LEARN FROM THE
MORTGAGE CRISIS

2. ABOUT ME
2
MIKE GARDNER
CEO - Agreement Express
Mike Gardner is the CEO of Agreement Express, a SaaS platform that automates onboarding and underwriting for the
financial services industry. As a 20-year veteran of the software industry, Gardner has evolved Agreement Express into
a solution trusted by top global acquirers like Cayan, Global Payments UK, Digital River, and Mercury Payments and
Fortune 500 financial institutions.
As a thought-leader in the risk and underwriting space, Gardner specializes in enabling organizations to build a roadmap
to improved underwriting and risk processes. With Agreement Express, he’s on a mission to make every customer
experience easier than the last for customers and organizations alike. Gardner has spoken on panels and presented
sessions with the Merchant Acquirers Association, PYMNTS.com, and the ETA.

3. WINNING THE ONBOARDING RACE
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4. AUDIENCE POLL QUESTION
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Q: Do you feel pressure to keep up with the new
payment processors? (Square, PayPal, etc.)
Not at all
Yes
In some ways
Hasn’t crossed my mind

5. Click to edit Master title style
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In the long run, you will lose the
merchant onboarding race if you
sacrifice smart underwriting for
fast onboarding.

6. WHAT YOU WILL LEARN TODAY
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1. Lessons learned from the 2008 mortgage crisis
2. How the mortgage crisis applies to merchant acquiring
3. Tactical strategies on how to win the onboarding race

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The Mortgage Crisis

8. WHAT HAPPENED?
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The mortgage race turned
into a race to the bottom.
“Open new mortgages at any
cost.”

9. WHO?
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Almost everyone.
25 companies brokered
$10 billion+ in subprime
mortgages

10. THE LEADER OF THE PACK?
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$97.2 billion
in high-interest subprime
loans
00

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They assumed only 20% of people would lie.
They assumed the liars would exaggerate by about 20%.
That was industry standard.

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Approximate number of mortgage
applications with exaggerated income
Average number that reviewed applicants
had inflated their income by50%
90%
BUT PEOPLE CAUGHT ON

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THE RESULT?

14. 14

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11 STATES
sued them for predatory lending practices.
$8.6 BILLION
paid in home loan and foreclosure relief
$67.5 MILLION
settlement paid by CEO Angelo Mozilo

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What Does This Have to do with Merchant Acquiring?

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WHAT IF?
=

18. 18
Square makes it
even easier than
Countrywide.
They will accept
almost anyone.

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BUT IS THEIR STRATEGY BEGINNING TO HURT
THEM?

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$5.7 MILLION
Square chargeback fraud from one single customer.

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“IN CONFIGURING OUR PAYMENTS
SERVICES, WE FACE AN
INHERENT TRADE-OFF BETWEEN
SECURITY AND CUSTOMER
CONVENIENCE”
-Square (from SEC Filing)

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THEY ARE WRONG
There is no inherent trade-off between speed and risk

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How to Win the “Long Run”
Onboarding Race

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1. Create a “Minimum Viable
Process” in underwriting

25. COMPRESS YOUR CLIENT EXPERIENCE
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1. Data entry (of any kind)
2. Shared Drives
3. Subjective decisions
4. Email in Workflow
5. Spreadsheets
6. Word Documents
7. Manual Lookups
8. Physical Paper
Working backwards from underwriting to client boarding, make a list
of all the potential inefficiencies. Look for:

26. ECONOMY OF MOTION
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Each one of these represents a wasted step and an opportunity to
compress time.
Before you take any factors out of your underwriting, or purchase
online data services, each ounce of “air” should be reduced to near
zero or eliminated from your process.

27. THE “MORE DATA” TRAP
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Many organizations make the mistake of thinking that they are better
protected by collecting more information and analyzing more factors.
This simply isn’t true and, in fact, extraneous data points just result in
you incorrectly turning away good opportunities.

28. LEAST COST UNDERWRITING
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Once you have your Minimum Viable Underwriting in place, you can
then focus on optimizing the order to achieve Least Cost
Underwriting.
Least expensive checks first, most expensive last.

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2. Automate your underwriting
so that your underwriters can
analyze

30. AUTOMATE AND ANALYZE
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Underwriters should be resolving “fuzzy matches”, completing complex
determinations, and arbitrating borderline decisions.
Now that the “air” is out of the process, configure your underwriting
systems so that your analysts don’t have to do any data entry or
calculations.

31. GOOD SCORING ALLOWS VISUALIZATION
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Everything should receive a numeric score. Although Pass, Fail and
Pend are accurate outcomes for Underwriting, identifying by how
much something passed or failed is critical in tuning your
underwriting.
75 75 75

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3. Optimize and adjust your
onboarding

33. OPTIMIZE
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• Capture all of the information you need the first time
• Validate in real-time rather than catching mistakes in QA
• Communicate time expectations with clients
First understand how fast you actually need to be. Many
organizations think they need an instant yes or no, where in fact
their market only needs a fast decision.

34. MONITOR AND ADJUST
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• The risk environment is always changing.
• Need to monitor and adjust to maximize number of merchants
you’re onboarding without compromising risk

35. INVEST ACCORDINGLY
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• Acquire more customers faster
• Reduce administrative overhead
• Improve operational efficiency and reporting
• Free up IT to work on higher value initiatives
• Create operational scalability and agility
If any of these steps are challenging for your organization, invest in
Onboarding Automation Software.

36. DOWNLOAD YOUR COPY
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Digital Guide: Building Your Roadmap to Underwriting Automation
Download Here

37. CONTACT US
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Agreement Express
Telephone : 1-877-247-3397
Email : sales@agreementexpress.com
www.twitter.com/agreexp
www.linkedin.com/company/agreement-express