What is Know Your Merchant?

Know Your Merchant (KYM) is due diligence you perform on businesses receiving payments from your platform. You’re vetting the business model, legal entity, beneficial owners, processing history, chargeback profile and fulfillment risk. Higher‑risk verticals—digital goods resellers, supplements, travel—require closer scrutiny.

Core checks: document the entity, confirm principals with identity verification, analyze website and terms, test fulfillment (expected shipping time, refund policy) and evaluate descriptor clarity. Screen names against sanctions and other adverse indicators; benchmark expected volumes and ticket sizes to risk‑based pricing and reserves. Post‑onboarding, monitor disputes and refunds for early warning signs.

Ops playbook: define rollout limits, escalate and require evidence for volume surges, and ensure decision trails. Escalate where risk increases—new product categories, new cross‑border routes—tighten controls using a risk‑based AML compliance program. KYM keeps your acquiring engine humming and your reputation unburned.