Glossary · compliance and risk
What is KYC?
KYC, or know your customer, is verifying that a person is who they claim to be before you provide them a financial service. An identity document, a check that the person presenting it is alive and present, and a record that it was done.
Who goes through it, and who does not
KYC is a requirement on regulated firms, not on merchants. When you accept a crypto payment through a licensed provider, you are not obliged to verify your shopper’s identity, and you are not being asked to.
Your own account is a different matter. Opening a business account with a regulated provider means the business is verified and so are the people who own and control it, which is KYB plus KYC on the individuals.
The shopper-side requirement is narrower and comes from the travel rule rather than from KYC as such: identifying information has to accompany the transfer. That is a data collection step at checkout, not a full identity verification.
It is worth keeping the two apart, because conflating them leads businesses to believe crypto checkout requires their customers to be verified. It does not.
What this means for your checkout
Three points that get muddled constantly.
Your shoppers are not KYC verified
They supply travel rule information. That is a different and much lighter obligation.
Frequently asked questions
Do my customers need to complete KYC to pay me?
No. They supply travel rule information at checkout, which is not the same thing and is considerably lighter.
Do I need to complete KYC?
You complete KYB as a business, which includes identity verification of the people who own and control it. KYB
Is KYC the same as sanctions screening?
No. KYC establishes identity. Screening checks whether you are permitted to deal with that identity. Both run, and they answer different questions.
Is this a good glossary term for us to rank for?
Not really. It is 3,000 US searches a month against Investopedia, banks and identity vendors. This entry exists to stop the term being confused with KYB and the travel rule, which is a real and common mistake.