How Wisetack Cut KYB Costs by Over 60% and Took Merchant Verification Control

The Problem: Paying to Lose Deals

Katie Beach’s team at Wisetack ran into a recurring issue with merchant verification. They were paying vendors to screen merchant applications, but a portion of those applications never made it into Wisetack’s review queue.

“Those applications failed to reach our queue, preventing the team from taking action on them.”

When issues occurred, it often took several days to investigate and resolve them, frequently requiring the team to fall back on manual verification. During that time, merchants would reach out to the support team multiple times for updates, increasing support volume and pulling time away from higher-value work. By the time the team tracked down what happened, some merchants would already be exploring other financing or payment methods.

“We ended up doing the verification work ourselves,” Katie says. “At that point, it wasn’t clear what value we were getting from paying a vendor when we still had to complete the verification manually.”

The economics of the previous setup didn’t align with how Wisetack operates. Wisetack works primarily with home improvement contractors, where accurate and timely business information verification is critical to onboarding merchants efficiently. The prior vendor charged for every verification attempt, regardless of whether it produced a usable result. Low match rates meant the team frequently had to complete verification manually, while still incurring vendor costs. This created unnecessary expense and operational drag. By contrast, the new approach prioritized higher match rates and only incurred costs when verification data was successfully returned, reducing manual work and allowing the team to operate more efficiently.

It became clear that the existing vendor setup and verification workflow was misaligned with the team’s needs and incentives. As Katie put it, “If we’re paying for verification, we need it to actually help us move faster and not create more work.”

The Decision: Prove It First

In early 2024, Wisetack began evaluating alternatives. The test was straightforward: Could Enigma match or exceed their existing vendors’ performance while reducing cost?

The results showed two things:

1. Strong match rates comparable to existing providers
2. Richer business context—Secretary of State filings, website verification, alternative addresses that helped Wisetack’s team make faster decisions on manual verifications.

By mid-2024, Katie made the call: move Enigma to primary position in the waterfall.

The Build: Three-Way Implementation

July through November 2024: Wisetack, Enigma, and Alloy (Wisetack’s orchestration platform) built the integration together.

The design preserved everything that worked. Wisetack’s underwriters wouldn’t need retraining. Alloy workflows stayed intact. Enigma slotted in as the first verification layer, with existing vendors as fallbacks.

December 2024: Wisetack moved Enigma to the top of the waterfall. The real work was just beginning.

The Optimization: Finding the Sweet Spot

The first three months—January through March 2025—were active tuning.

Wisetack’s team worked with Enigma to improve fuzzy matching for business name variations. A contractor filing under “John’s Home Repair LLC” but applying as “Johns Home Repair” shouldn’t require manual review.

The optimization paid off:

Katie’s assessment: “So many fewer errors.”

Reviews weren’t just fewer—they were faster and cleaner. When underwriters did review applications, they were doing actual decision work, not chasing data mismatches.

The Consolidation: Taking Control

By September 2025, performance metrics showed clear improvement. Enigma delivered higher match rates, the verification workflow stabilized, and the fintech KYB vendor was no longer required in the process.

Katie’s team removed them entirely.

“We actually removed them,” Katie says. “We have a new workflow now, without them at all.”

Wisetack went from three KYB vendors to two: Enigma as primary, with another vendor as backup for edge cases.

Manual review rates settled back to 43%—essentially the same percentage as before Enigma. But the quality of the process had fundamentally changed:

• Applications consistently flowed into Wisetack’s review queue without gaps or handoffs.
• Manual reviews no longer duplicated paid vendor work, reducing unnecessary cost.
• The team maintained full control over the verification workflow, eliminating external bottlenecks in merchant approvals.

The Results: Money, Control, Quality

Money: Over 60% Cost Savings

Wisetack slashed verification costs by more than 60% compared to their previous fintech KYB vendor.

The waterfall position matters. As the primary vendor, Enigma handles most verifications. Cascade calls to more expensive backups happen rarely.

When Katie’s team briefed leadership on the economics, the reaction was immediate:

“Oh my gosh, it's gonna be... we are very excited.”

Control: Everything in the Queue

Before Enigma, parts of the verification process lived outside of Wisetack’s direct workflow. When issues occurred, applications could be delayed or require follow-up with the vendor, which made it harder for the team to track status and respond quickly to merchant inquiries.

With Enigma, all applications remain within Wisetack’s queue. The team has full visibility into every verification step, no dependency on external turnaround times, and clear status updates they can share with merchants when questions arise.

Quality: Faster, Cleaner Reviews

Manual review percentage ended up similar to baseline (42% → 43%). But the nature of those reviews changed.

Katie’s summary: “So many fewer errors.”

Why Enigma Won

The technical performance mattered. But Katie points to something else when asked why Enigma succeeded where other vendors struggled:

“Y'all have been fantastic, and just so responsive. My biggest fear whenever I'm working with anyone outside the org is that sometimes it's just hard to get things fixed... You've made this not clunky or weird.”

The partnership model worked:

• Validation before commitment
• Active optimization during the tuning period
• Fast response when issues surfaced
• Richer business context that helped underwriters make decisions

And the economics were undeniable: 60%+ cost savings while maintaining quality.

The Transformation: From Firefighter to Architect

Before Enigma, the team spent significant time managing vendor-related issues, tracking down delayed applications, and completing manual verification work that duplicated paid vendor checks.

After moving to Enigma, Wisetack consolidated verification into a single, transparent workflow. The team gained full visibility into application status, reduced unnecessary vendor costs, and completed reviews more efficiently without increasing headcount.

The change wasn’t about eliminating manual review. It was about improving the efficiency and reliability of the verification process so time and spend were aligned with actual outcomes.

Key Takeaways for KYB Teams

1. Validate before committing. Wisetack tested Enigma against existing vendors before switching. The data informed the decision.

2. Waterfall position matters. Primary vendor position means lower overall costs. Cascade carefully.

3. Control matters as much as metrics. A 42% manual review rate where you control the queue beats a 33% rate where applications drop off.

4. Cost savings and quality aren’t trade-offs. Wisetack cut verification costs 60%+ while reducing errors and improving underwriter productivity.

About Wisetack

Wisetack is an embedded financing platform for home improvement contractors. The platform enables contractors to offer flexible payment options directly at the point of sale, helping them close more jobs while delivering a smooth financing experience.

Katie Beach runs credit operations, where her team verifies every merchant before they can start financing. Business name, EIN, ownership, address—the “Big Four” of Know Your Business.

About Enigma

Enigma provides intelligent business verification for embedded finance, lending, and payments companies. Our API delivers real-time KYB data—business identity, ownership, financial signals—with the context compliance and risk teams need to make fast, confident decisions.