How Merchant Onboarding Works: Process, Documents & What to Expect

updated: 02/03/2025

Opening a merchant account is a necessary step for online businesses to process financial transactions. However, the process of onboarding is not as simple as filling out an application form. It involves various stages of checks and evaluations that ensure compliance with regulations and minimize the risk of financial fraud.

In this guide, we break down the onboarding process step by step: what it includes, what documents you need, how long it takes, and how to avoid common mistakes.

What Is Merchant Onboarding?

Merchant onboarding is the process by which a business is vetted and approved to open a merchant account with an acquiring bank or payment processor. This includes risk checks, document verification, website compliance review, and technical setup.

It ensures the merchant is legitimate, operates a legal business, and complies with card scheme and anti-fraud regulations.

Why It Matters

The onboarding process protects both acquiring banks and merchants:

• For banks, it minimizes financial and reputational risks.

• For merchants, it ensures stable payment processing and credibility with payment partners.

Overview of the Merchant Onboarding Process

When merchants want to open a merchant account to process  transactions, they need to undergo an onboarding process in order to prove their compliance with all regulations and standards required to operate an online shop. Although the requirements of each acquirer may defer, the general structure of the onboarding process is the same and has several stages:

1) Step 1: Pre-Check & Initial Assessment

Before submitting a full application, most payment service providers (PSPs) or acquirers run an initial check based on:

• Business model and industry

• Targeted countries

• Website readiness

• Projected monthly volume

• Processing history (or a business plan if none)

This helps determine the best-suited acquiring partners and whether the business falls under high-risk categories like crypto, gambling, or nutraceuticals.

What you’ll need:

• Company name

• Website URL(s)

• Test credentials (if needed)

• Basic business plan

• Target markets and volumes

Pre-checks involve sanctions screenings, brand violations, and business model evaluation. If the merchant passes this stage, they receive conditional pre-approval and a pricing proposal.

2) Step 2: Full Application & Document Submission

At this stage, the merchant starts collecting the required documentation to officially submit the application. When he has obtained the full pack of documents, the merchant usually needs to fill out and/or sign an application form or merchant agreement.

Additionally, directors and principals might be requested to go through an ID verification to prove their identity. The process of reviewing the provided information is also referred to as “Underwriting” and is divided into two parts – KYC/KYB and Website compliance. It involves evaluation of the risk and confirmation about the accuracy of the submitted documents.

This is the most complex part of opening a merchant account but is as important for the merchant as it is for the bank because in this way, business owners know that their online businesses are protected. Here’s what the banks would expect to see:

• Company documents -Certificate of Incorporation, Memorandum and articles of association, Share Certificate, Certificate of Registered Address, Certificate of Directors, etc
• Identity Documents (valid) - Passport/ID card for each director/principals
• Proof of Address - Utility bill – , Bank Statement (not older than 3 months)
• Proof of domain ownership
• Signed PCI DSS Self-Assessment Questionnaire (SAQ)
• Proof of Company Bank Account – Bank Confirmation letter or statement
• Business License (if applicable)
• Business specifics - Desired settlement and processing currencies, billing descriptor, etc
• Contact details - Email and phone number of the director/principals

While the list of documents mentioned above is what is requested by almost every bank, it is not exhaustive and acquirers might request additional documents. It also depends on banks‘ policies how recent the documents need to be. Usually they accept documents issued within the last 6 months but some acquirers might request renewed documents so the onboarding may sometimes take longer than usual.

Moreover, some businesses like crypto exchange, nutraceuticals, gambling and others would require the provision of additional industry-related documents (such as legal opinions, service/manufacturing/reseller agreement, license, etc.) and in some cases with high-risk merchants, acquirers require an enhanced due diligence (EDD) that might prolong the underwriting process. During this phase, the pricing that would be applicable also needs to be discussed between the merchant and the acquiring bank (and the payment service provider if such is involved in the process).

At this stage of the process, there’s a back-and-forth communication between the bank and the merchant (or the PSP if such is involved in the onboarding) as banks might not approve all of the documents and request new, translated or notarized and apostilled ones.

Website Compliance Check

A website compliance also takes place simultaneously. Banks review the applying URLs and investigate all of the functionalities of the webpage. Before accepting a website to their portfolio, acquirers need to make sure there’s no misleading content or breach of the standards provided by the card brand schemes. The 4 elements they check in more depth are: company information and card scheme brand logos on the footer, website’s policies, the pricing and last but not least – the checkout page. If there’s any missing or confusing information, acquirers would request merchants to make the necessary changes on the URLs.

Due to these requests, the onboarding process can be finalized in between 2 weeks and several months depending on merchant’s response time and readiness to address banks’ request; as well as bank’s acceptance of the provided documents and websites. When all the requests have been fulfilled, acquiring banks go through client’s whole application once again to confirm their final acceptance. The merchant would then get an official approval and proceed with signing the merchant agreement. Upon countersigning the contract, the acquirer will submit a request for MID issuing.

 

3) Merchant Account (MID) Issuing

The MID issuing takes couple of days due to technical work involved in the setup. Acquirer’s integration team will set up the merchant account in their systems and provide the client with API keys and credentials to his merchant account. Catalystpay’s Technical team uses these credentials to set up the merchant account within our payment gateway. Once this is completed, the merchant receives a welcome letter with all the technical information he needs to integrate the MIDs from his end. There are multiple ways for the merchant to integrate – they can either use any of the pre-integrated plug-ins, or use our hosted payment page, or even go custom with Server-to-server integration.

As a final step after the integration is completed, merchants need to start testing if the MIDs work properly by making successful test transactions on the website.

How Long Does Merchant Onboarding Take?

It varies:

• Standard onboarding: 1–3 weeks

• High-risk industries: 3–8+ weeks

Timeline depends on the merchant’s document readiness and the acquirer’s internal review process.

Pro Tip: Use Multiple Acquirers

Even after onboarding, merchants can (and should) work with more than one acquiring bank.

Benefits of a multi-acquirer setup:

• Improve conversion rates

• Increase transaction approval rates

• Route failed transactions to backup acquirers

• Strengthen negotiating power

• Avoid business disruption if one acquirer fails

Get Expert Help From a PSP

A good payment service provider like CatalystPay does more than just open your merchant account. They:

• Match you with the right acquiring partners

• Guide you through compliance requirements

• Help structure your application to minimize delays

• Offer fraud prevention tools and ongoing support

Conclusion

The merchant onboarding process may seem complex, but it’s critical for secure, compliant, and scalable online payments. Whether you’re a first-time merchant or switching providers, understanding the process helps you prepare and avoid delays.

With CatalystPay, merchants get end-to-end support—from documentation to integration—to ensure a smooth onboarding experience.

 

Author: Anna Miteva, Senior Underwriting Account Manager