Growth in the digital economy shows no signs of slowing down, with the World Economic Forum projecting that 70% of new value in the next decade will come from digitally-driven business models. At the heart of this transformation are the payment, e-commerce and fintech sectors, acting as the vital oil in the machine. With competition fiercer than ever and new entrants disrupting the landscape, these industries are turning to cutting-edge strategies to maintain their edge and drive growth.
When it comes to onboarding new merchants, the user experience is a key area of focus. Beyond just increasing the number of merchants they engage, these organisations are prioritising faster, more efficient onboarding processes. Optimising the merchant onboarding experience has become a crucial differentiator.
Conversion: The ultimate onboarding metric
Conversion is the best measure of how well the process guides potential merchants from initial interest to active participation. A high conversion rate suggests that the onboarding process is smooth, user-friendly and free of unnecessary obstacles, making it easy for merchants to complete their registration and start using the service.
Organisations invest substantial resources—time, money and effort—into creating competitive solutions, developing unique selling propositions and building a strong market reputation. These efforts are complemented by costly marketing campaigns designed to bring prospects to the doorstep. However, all of this investment can be undermined if the onboarding process is inefficient, causing prospects to abandon the journey due to avoidable friction. Worse still, legitimate merchants may be lost due to issues such as information gaps during Know Your Business (KYB) and Ultimate Beneficial Ownership (UBO) checks, leading to false positives and unnecessary rejections.
In a fully controlled environment, where a prospect has already expressed interest and is at the final stage of the journey, losing them at the onboarding stage is more than a missed opportunity, it’s a self-inflicted wound. By deploying the right technology and adopting best practices, organisations can ensure that prospects not only reach the front door, but are welcomed in and converted into long-term, satisfied business partners.
Here are three key conversion indicators to focus on:
- Abandonment rate
The percentage of merchants who begin the onboarding process, but drop off before completing it. High abandonment rates indicate friction, which could be any element of the merchant onboarding experience that slows down or complicates the process of conversion. This includes complex forms, too many back-and-forth requests for information, and slow response times.Research[1] shows that during digital onboarding, 40% of prospects abandon an application that takes longer than 10 minutes—and drop-off rates continue to climb from there. Every 10 seconds added to the application process correlates roughly to a 5% increase in application abandonment. Each year, the global commercial and business banking market alone loses more than $3 trillion due to abandonment during the onboarding process. - Response times
This relates to the time it takes for a business to respond to a merchant’s enquiry or action. Faster response times are linked to higher conversion rates, as users are more likely to convert when their needs are promptly addressed.
Visa Consulting and Analytics[2] recommends that service providers should limit the onboarding journey time to a maximum of 10 minutes. Best practices they recommend include avoiding repetition by only asking for each piece of data once, and communicating simply and concisely at every stage of the process. - Insult rate
This metric refers to the percentage of legitimate merchants who are wrongly denied service or access due to false positives during merchant verification processes. A high insult rate can significantly harm conversion rates by frustrating potential customers. In fact, studies reveal[3] that false positives cost businesses 13 x more than actual credit card fraud. This means an inefficient merchant verification system could do more damage to your business than not having one at all.
Why fast, accurate merchant onboarding matters in the Asia-Pacific
The Asia-Pacific (APAC) region holds vast potential for growth in the payments, e-commerce and fintech sectors. Consumers are increasingly shifting from cash to contactless and electronic payments, driven by the rapid evolution of payment technology in the region.
Mobile payments have seen remarkable growth due to the ease of transactions, the widespread adoption of smartphones, and the financial inclusion capabilities that technology offers. As smartphones and internet access continue to expand, the use of mobile wallets has seen a significant acceleration. In APAC, digital wallets have become the dominant payment method for e-commerce, and at the point of sale, they account for 50% of all spending[4] — the highest proportion of any region globally.
In such a fast-growing market, with so many options available, quick and efficient merchant onboarding processes will be a key factor in driving conversions. The competition in APAC is intense, with numerous players vying for a share of the rapidly growing digital economy.
In 2023, global e-commerce surpassed $6.1 trillion[5], with APAC leading in digital wallet usage and transaction volume. This upward trend is expected to continue, with APAC projected to achieve double-digit e-commerce growth at a compound annual growth rate (CAGR) of 11% through 2027, outpacing regions like Europe and North America.
The APAC payments market is estimated to be worth USD 13.93 trillion in 2024[6], with expectations to reach USD 26.03 trillion by 2029, growing at a CAGR of 13.32% during this period.
Opportunities in the APAC payments and e-commerce landscape
To help the industry understand the opportunities across the vast and diverse APAC region, Payments and Commerce Market Intelligence (PCMI)[7] has divided APAC into five country clusters:
- The Giants: India and China
Massive populations create dynamic revenue opportunities for global companies. - SEA Block: Malaysia, Indonesia, Philippines, Vietnam, and Thailand
Considered the rising stars of Asia-Pacific with booming economies and advanced technologies. - The Treasury Centres: Hong Kong and Singapore
Systemically important countries where most liquidity of global companies reside. - The Mature Markets: Korea and Japan
Two distinct mature markets with highly developed payment networks. - The Pacific: Australia and New Zealand
Geographically distant markets with mature digital footprints and heavily banked/carded populations.
Payment preferences
Digital wallets:
In 2023, digital wallets were the leading e-com payment method in: China, India, Indonesia, The Philippines and Vietnam. By 2027, forecasts indicate they’ll be joined by Hong Kong, New Zealand, Singapore, South Korea and Taiwan.
Credit cards:
In 2023, credit cards were the people’s choice for online payments in: Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea and Taiwan. Direct credit card spend outside of digital wallets accounted for 12% of APAC’s e-commerce transaction value in 2023.
Common onboarding obstacles in APAC
To capitalise on all the opportunities in the APAC market, companies must address several common merchant onboarding challenges:
- Business and beneficial owner verification:
Delays in KYB and UBO processes, often due to inefficient systems or manual checks, can slow down onboarding in a market where speed is critical. - Language barriers:
Managing data in multiple languages and formats, especially across borders, can lead to misinterpretations and compliance issues without the right linguistic and cultural expertise. - Lack of local expertise:
Identifying and verifying merchants in unfamiliar jurisdictions is complex without on-the-ground knowledge of local regulations and data structures.
The solution: A digital-first approach
A technology-enabled approach to merchant onboarding is significantly faster and more cost-effective than traditional methods. A Mastercard study[8] on digital merchant onboarding practices in the APAC region found that traditional onboarding processes can take anywhere from 3 to 7 days, or even weeks, due to their manual and fragmented nature. This lengthy process involves time-consuming tasks such as phone interactions, multiple email exchanges and in-person validations, all of which contribute to delays, potential human errors and increased costs. The average cost of onboarding a merchant through these traditional means, which also involves marketing and customer service, ranges from £250 to £350.
In stark contrast, a digital-first approach drastically reduces the onboarding time to just 5 to 15 minutes. This approach leverages automation, with AI and machine learning managing risk assessments and due diligence, thereby minimising the need for human intervention. Additionally, dynamic application forms streamline the data collection process, and ongoing monitoring allows for real-time adjustments to risk profiles. The cost associated with this automated onboarding process drops dramatically to around £8 per merchant, representing a cost reduction of approximately 96.8% to 97.7% compared to traditional methods.
What defines a best-in-class digital-first merchant verification solution?
Companies can significantly reduce both the time and cost of bringing new merchants onboard with the following capabilities:
- Reliable, real-time data
Merchant verification technology that offers access to live data from government registries and other official sources ensures accurate and up-to-date information on businesses and beneficial owners. This helps to reduce abandonment and insult rates while accelerating response times. - Automation
Innovative automation capabilities, such as autofill features within merchant-facing portals, create a faster, better onboarding experience for all involved. These features automatically populate forms with accurate, verified data sourced in real-time from official records, reducing keying errors and minimising the need for back-and-forth data submissions.
- Artificial intelligence
AI can also play a valuable role in managing complexity during KYB and UBO compliance. For example, AI-driven auto-translation tools ensure that critical business information is accurately translated or transliterated across different languages and alphabets, minimising errors and ensuring a smooth verification process. Additionally, AI-powered UBO search capabilities, combined with advanced data visualisation tools, allow service providers to unravel complex corporate structures and verify beneficial owners with greater speed and accuracy. - Advanced integration tools
To ensure seamless data flows, companies need tools that effectively integrate their merchant verification systems with the other software they use for onboarding. An API (Application Programming Interface) provided by the merchant verification system facilitates this by allowing different software systems to communicate and share data. A unified API, in particular, enables integration across multiple APAC markets through a single connection point. This approach simplifies the onboarding process by providing consistent access to data from various jurisdictions, reducing the need for multiple, market-specific integrations. By using a unified API, service providers can save time and resources, making it an essential tool for efficiently expanding services across different regions.
Accelerate merchant onboarding with AsiaVerify
AsiaVerify offers all these advanced features, coupled with on-the-ground expertise across the APAC region. As a best-in-class business verification platform, AsiaVerify provides access to over 344 million entities and 2.9 billion individuals across 13 APAC jurisdictions. The platform streamlines the merchant verification process, empowering clients to make informed decisions and ensuring they have a complete understanding of who they are doing business with.
Next steps
In APAC, seamless merchant onboarding is a key differentiator. Adopting a digital-first verification system powered by real-time data, advanced technologies and seamless integration capabilities can significantly reduce abandonment rates, enhance compliance and lower insult rates by minimising false positives. Investing in a top-tier solution like AsiaVerify is essential for staying ahead in this competitive sector, and unlocking both immediate and long-term growth opportunities.
Discover how AsiaVerify can meet your unique merchant verification goals across the APAC region. Learn more here.
[1] https://www.mantl.com/resources/blog/3-biggest-obstacles-to-a-better-conversion-rate
[2] https://corporate.visa.com/content/dam/VCOM/global/services/documents/vca-how-to-boost-your-customers-onboarding-experience.pdf
[3] https://seon.io/resources/false-positives-and-customer-insult-rate-in-fraud-detection/
[4] https://worldpay.globalpaymentsreport.com/en
[5] https://worldpay.globalpaymentsreport.com/en
[6] https://www.mordorintelligence.com/industry-reports/asia-pacific-payments-market
[7] https://paymentscmi.com/PCMI-presentations/2024_PCMI_Payments_Megatrends_in_APAC.pdf
[8] https://www.mastercardservices.com/en/advisors/payments-consulting/insights/digital-merchant-onboarding
