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zMerchant® Onboarding and Risk Monitoring Solution


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zMerchant Brochure

As consumers continue to decrease their reliance on cash and checks, merchants of all sizes want to provide customers the option to pay for goods and services with credit cards, debit cards, and alternative payment products. By enabling merchants to accept these forms of payment, merchant acquirers are exposing themselves to risk. They need the tools to efficiently manage that risk while growing their merchant portfolios.

Zoot’s zMerchant® onboarding and risk monitoring solution enables merchant acquirers to be more sophisticated and efficient in their initial merchant vetting and ongoing monitoring.

To protect themselves from taking on too much risk, merchant acquirers need the ability to evaluate a new business, identifying the creditworthiness and likelihood of the business committing fraud against the merchant acquirer or consumers. Zoot’s zMerchant software solution gives acquirers access to a wide variety of business and consumer credit data as well as a wealth of alternative credit and fraud data. This gives merchant acquirers the flexibility to assess the risk of different merchants differently. For established businesses, it might be appropriate to look at a business credit file. For a small start-up, it might make more sense to look at the consumer credit history of the business principal(s).

Once the appropriate data has been accessed, it’s critical that the merchant acquirer be able to efficiently underwrite the merchant application. Zoot’s robust business rules engine, which is a core component of all of Zoot’s solutions including zMerchant, enables these onboarding decisions to be made according to the acquirer’s unique business logic. That logic can be configured through Zoot’s business user tool to include options for dealing with merchants that border on too risky, such as requiring the merchant to have a higher reserve level holding back a certain amount of revenues for a longer amount of time than other companies. This helps to ensure funds are available to cover charge backs if the merchant intentionally walks away from its business duties or is not fulfilling orders for its customers.

zMerchant onboarding process

Risk Monitoring
Merchant risk doesn’t disappear once the merchant application has been originated. Acquirers need to be able to actively monitor each of their merchant accounts closely in order to detect changes that might foreshadow an increase in risk. Using Zoot’s business rules development tool, merchant acquirers can configure their unique risk triggers that will help them identify merchant behaviors that might alter the original risk taken on by the acquirer. For example, statistically significant changes in the merchant’s sales volume, average sales price, or number of charge backs are all potential triggers that could alert the acquirer to a possible problem.

Once potentially risky merchants have been identified, they can be manually reviewed by agents to determine why the merchant was triggered as a risk and what actions the acquirer needs to take as a result. To make this process as efficient as possible, manual review screens and business rules are leveraged to consolidate information for quick review and resolution of risk triggers. The acquirer then will increase the reserves on the merchant’s account, ask for better financial statements, cancel the account due to fraud, or the relationship will proceed as before by explaining the situation. The acquirer’s business users can develop, configure, and deploy visual elements to optimize the review screens using one easy-to-use interface without programmer assistance, decreasing the dependence on constrained IT resources.

zMerchant monitoring process

Greater Efficiency, Less Risk
Merchant acquirers deal with a lot of risk. In order to compete effectively, acquirers need to be able to grow their portfolios without incurring prohibitive operational costs or taking on too much risk. Zoot’s zMerchant was designed to help acquirers grow their merchant portfolios while decreasing their costs and controlling their risk. A more automated, data-driven onboarding process enables merchant acquirers to make better decisions faster. Configurable risk triggers give acquirers insight into potentially risky changes in merchant behavior. Robust queues and review screens allow acquirers to make their manual processes more efficient and to intelligently allocate their manual resources to the most review-worthy merchant profiles and activities.

The end result? Greater efficiency and less risk.  


There are techniques, tools and data sources available to combat merchant fraud proactively and efficiently. Automation of new merchant customer onboarding and risk monitoring of merchant financial behavior is conceptually very similar  to the analysis used in the fraud and credit decisioning of consumers and can be effectively utilized by merchant acquirers to reduce their credit and fraud losses.

—Dennis Moroney, research director, CEB TowerGroup


Take a deeper dive:
Solution Brochure: zMerchant® onboarding and risk monitoring solution brochure
Industry Brief: Ten Best Practices to Manage Merchant Risk
White Paper: Merchant Acquisition: Finding the Best Solution in a Changing Landscape