Know Your Business

Definition

Know Your Business (KYB) is the process of verifying a legal entity before you board it onto payments, banking, or lending: formation and good standing, authorized representatives, and the people who own or control the company (beneficial owners and control persons). Public BSA/AML and customer-due-diligence practice treats business customers as a different check than individual consumers. KYB is not KYC. KYC verifies a person. This page does not print an ownership-percentage threshold or a regulator form. Those requirements sit on the bank, PayFac, or lender program you are boarding into, and they change.

This page is business-entity verification. Adjacent terms are Vertical Fintech’s. They are not this page. KYC (the person-level check), sponsor bank and PayFac (who underwrites), and banking-as-a-service sit next to this definition.

Why it matters

If you run vertical software and board merchants, sellers, or SMB accounts, KYB is the gate. A bank or PayFac will not treat a trade name as a customer. They want the legal entity, the owners, and a reason the activity matches the business. You can buy KYB software and still not be the underwriter. The registered party sets the policy, the acceptable documents, and the exception path. Ask who makes the approve or decline, whether beneficial-owner collection is in your flow, and whether the vendor is only returning data. Do not copy a regulator or bank questionnaire onto a marketing page and call it your program. There is no public KYB score on this directory.

Related on Vertical Fintech

• Miscellaneous: Infrastructure around the money. Onboarding and risk live here, not on the PayFac table.
• Middesk: Business entity verification, UBO and principal checks, exception-only analyst review. Not a bank or processor.
• Alloy: Orchestrates multi-vendor KYC and KYB workflows for banks and fintechs. Not a bank.
• Persona: Identity verification and KYC/AML flows, with deeper KYB on higher tiers after a sales conversation.

FAQ

Is KYB the same as KYC?

No. KYC verifies a person (identity, watchlists, sometimes documents). KYB verifies a legal entity and the people who own or control it. A merchant or SMB account usually needs both: KYB on the company, KYC on the control persons. The next glossary term is KYC.

If I run KYB in my product, am I the underwriter?

Usually no. KYB software returns data, scores, or workflow outcomes. The bank, PayFac, or lender still decides who is approved under their program. Confirm who the contract names as the decision-maker and what happens on an exception.