KYC for Marketplace: Best Security System

Online shopping has revolutionized the market and created a new shopping experience. But the lack of fundamental verification has made online markets vulnerable to various fraud and money laundering schemes. To protect themselves from fraudsters and fines from regulators marketplaces should comply with the KYC guidelines. The first step would be to implement a set of measures aimed at protecting transactions and customer data using online marketplace ID verification.
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Identity Verification for
Marketplace KYC Compliance

Juniper Research forecasts that by 2025, merchants will lose more than $206 billion from online payment fraud. The operation of marketplaces requires regulation. Carrying out financial transactions on behalf of third parties involves the creation of virtual payment accounts, so it is important to monitor the compliance of all interested parties with KYC and AML requirements. KYC-based customer segmentation can significantly reduce the risk of fraud, violation of legal norms, and operation efficiency drops.

Identity Verification for Marketplace KYC Compliance
Sellers Sellers verification in compliance with regulations

Sellers verification in compliance with regulations

Merchants, companies, or individuals who sell services or goods on the site must be regulated by the payment system or the bank with which they cooperate.

Every modern online marketplace has its own seller identity verification procedure. Some allow traders to start selling only after they have verified their identity. Others provide some kind of incentives for certified sellers. In any case, to process each transaction between the supplier and the buyer, the platform must establish that credible people are behind their accounts. For that, they use validation as part of user onboarding.

Additional security can be provisioned by employing machine learning-based fraud protection with behavioral monitoring, image editor tampering detection, biometric spoofing protection, and other advanced protection methods. Finally, a Know Your Transaction (KYT) system will help you monitor and safeguard the movement of funds.

Sellers verification for business

Sellers verification for business

Any successful business must have an established set of means to fight fraud and process customer claims efficiently. If the seller is a legal entity, a merchant identity verification should conform to the Know Your Business (KYB) standard. This is a reliable way to help you understand the structure, operating model, and hierarchy of a company, as well as identify owners, executives, and other important decision-makers.

The business verification process may result in the suspension of the account due to the inability to verify the accountability or ID of the company and/or its representatives. In turn, the suspended seller must have a way to protest the suspension and provide the required clarifications.

The site may request additional information but a vague spelling of contractual obligations with sellers can cause problems. Any personal data provided as part of merchant verification must be processed per the platform's privacy notice and all the applicable local and international laws and regulations.

Next but not least, suspicious individuals and companies can be subjected to the application of Enhanced Due Diligence (EDD) measures. This may be a request to confirm the source of funds or selective verification of transactions.

Bank account or credit card verification

Bank account or credit card verification

According to UK Finance's Annual Fraud Report 2022, losses from online banking and payment card fraud reached £730 million last year. In such an environment, bank account/card verification is extremely important. It allows you to be sure of the transaction's validity. Bank credentials verification is a sure way to check up on the specific party's legitimacy. Today it is an important part of providing a positive customer experience.

There are two main methods for such attestation:
Credit trustability check: In countries where such organizations are established, the transaction party's accountability can be verified with the appeal to the credit bureau.
Open banking check: Where applicable, the party's accountability can be ensured with the appeal to their bank.

Checking in with a bank can also help to diminish errors attributed to human factors, such as incorrectly entered card data. In the best case, an error will result in a failed or refunded payment. At worst, the payment will go to the wrong account. By relying on an efficient bank account verification system, marketplaces can prevent this from happening.

Large buyers verification

Large buyers verification

As traders start to offer more services and increase the number of transactions, their security risks also grow. The platform must watch for thresholds being exceeded, suspicious activity, product changes, and even unfavorable media mentions.

KYC onboarding for a marketplace sub-merchant is vital. It is important to not only assess risks but also automate routine processes, at the same time increasing their accuracy using advanced data analysis tools. This will help to get rid of financial fraud and chargebacks efficiently.

While manual verification may be sufficient in some cases, it is better to rely on innovations. Through automation, trading platforms can reduce costs and generate more profit for both themselves and their users.

Employ the Top-of-the-shelf KYC!

Why KYC is indispensable

The efficient Know Your Customer system helps mitigate the fundamental problems of online trading. It ensures compliance with the law and also provides opportunities to increase sales and improve customer service

The KYC for marketplace solution by KYCAid is a set of the latest methods and tools to ensure accuracy and minimize the time of verifications. We provide a wide range of services for marketplaces: Document Check, Liveness verification, Video quiz verification, regulatory compliance check, proof of address, Payment method verification, AML screening, and many more. In addition, our system will instantly notify you in the event of the smallest threat.

By choosing the advanced identity verification system from KYCAid, you will get a reliable and fast mechanism to secure transactions of any size!

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