What merchant underwriting checks
- Identity and ownership: company records, directors, beneficial owners, sanctions screening
- The business model: what is sold, to whom, in which countries, under which merchant category code
- The website: prices, terms, refund policy and delivery times
- Finances and history: statements, earlier processing, chargeback and refund rates
- Delivery risk: how long after payment the customer receives the goods or service
- Scheme lists: terminated-merchant databases, and prohibited or restricted categories
The result is an approval, a refusal, or an approval with conditions: a cap on volume, a reserve, slower settlement, a higher price or required fraud tools.
How underwriting continues after approval
A merchant can change after it is boarded. Monitoring watches for volume beyond what was declared, a rising chargeback or refund rate, a change in what is sold, and payments processed for another business, known as transaction laundering.
Findings feed back into the conditions: limits rise for a clean record, and a reserve is added or the account closed for a bad one.
Why underwriting matters to a payment facilitator
A payment facilitator underwrites its own sub-merchants, under a policy its acquirer has approved, and carries their losses first. The design choice is speed against risk: instant approval with low limits and a fuller review as volume grows, or a full review before the first payment.
Underwriting, KYB or onboarding?
- KYB
- Establishes who the business and its owners are, a duty under anti-money laundering law. Underwriting adds the commercial question of whether the risk is worth taking.
- Merchant onboarding
- The whole path from application to first payment: underwriting, contract, configuration and integration.
- Credit underwriting
- The same word in lending and insurance: assessing a borrower or a policy. The method is related and the subject differs.
Where Underwriting shows up in a platform
Modules that do the work
- Merchant onboardingBusiness sign-up, verification and underwriting, from application to first payment.
- KYC / AMLIdentity checks, screening and ongoing monitoring, with the verification provider you choose.
- Fraud & riskReal-time fraud scoring, limits and case management, with the risk engines you already trust.
- Card acquiringCard acceptance on the phone, in store and online, through the acquirer you choose.