Know Your Customer

Definition

Know Your Customer (KYC) is the process of verifying a natural person before you open an account or let them transact: collect identity data, match it to documents or authoritative sources, and screen watchlists as the program requires. Public BSA/AML and customer-identification practice treats this as the person-level check. KYC is not KYB. KYB verifies a legal entity and its owners. This page does not print a document list, a score threshold, or a regulator form. Those sit on the bank, PayFac, or lender program you are boarding into, and they change.

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

Why it matters

If you run vertical software and your users are people (control persons, sellers, account holders), KYC is the gate the bank or PayFac will ask about. You can embed an identity vendor and still not be the decision-maker. The licensed party sets CIP-style policy, acceptable documents, and what happens on a fail. Ask who receives the result, whether you are collecting for them or deciding yourself, and whether the use is FCRA-sensitive (credit, employment, similar eligibility). This directory does not invent a CRA disclaimer. Confirm that with counsel if the use is eligibility. Do not treat a selfie vendor as a bank charter.

Related on Vertical Fintech

• Miscellaneous: Infrastructure around the money. Identity and risk live here.
• Know Your Business: The entity-level check. A merchant or SMB account usually needs both.
• Persona: Government ID, selfie, database verification, and watchlist screening in configurable KYC/AML flows.
• Socure: Identity and AI risk decisioning, including KYC, document verification, and watchlist screening.
• Alloy: Orchestrates multi-vendor KYC and KYB workflows. Not a bank.

FAQ

Is KYC the same as KYB?

No. KYC verifies a person. KYB verifies a company and the people who own or control it. Control persons on a business account usually get KYC. The company gets KYB. Use both words on purpose.

Does running KYC software make me a bank or a credit bureau?

No. Identity vendors return data and workflow outcomes. The bank or PayFac still owns the customer-identification program unless the contract says otherwise. Public pages for some vendors do not print a clear FCRA or CRA posture. Confirm that if you use the output for credit, employment, tenant, or similar eligibility decisions.