KYC, or Know Your Customer, is the set of procedures that financial institutions and payment companies use to verify the identity of their customers and assess the risk they may pose. At its core, KYC answers three questions: who is this customer, are they who they claim to be, and do they present any risk of involvement in financial crime? The process typically involves collecting identity documents, verifying them against trusted data sources, screening the individual or business against sanctions lists and politically exposed persons (PEP) databases, and making an ongoing assessment of whether the customer’s transaction patterns are consistent with their stated profile.
KYC is not optional. It is mandated by financial regulations in virtually every jurisdiction, including the EU’s Anti-Money Laundering Directives, the US Bank Secrecy Act, and the UK’s Money Laundering Regulations. These laws require regulated entities to perform due diligence on their customers before establishing a business relationship and to maintain that diligence throughout the relationship. The depth of diligence scales with the perceived risk — a sole trader processing low-value domestic payments will undergo lighter checks than a cross-border marketplace handling high-value transactions in high-risk jurisdictions. Failure to meet KYC obligations can result in regulatory fines, criminal liability for officers, and loss of banking or payment processing relationships.
For platforms that onboard merchants or sub-merchants, KYC is one of the most friction-heavy parts of the process. Merchants must submit documents, those documents must be verified, screening must be performed, and risk assessments must be documented — all before the merchant can begin processing payments. Done poorly, KYC creates delays that cause merchant drop-off. Done without sufficient rigour, it exposes the platform to regulatory action and financial crime liability.
Shuttle Global’s infrastructure supports the merchant onboarding workflows that platforms need to meet KYC obligations efficiently. When a platform uses Shuttle’s Embedded Payments to offer payment processing to its own customers, Shuttle’s onboarding layer can facilitate the collection, verification, and risk assessment steps required by the downstream PSPs. Because Shuttle connects to over 40 payment service providers, each with their own KYC requirements, the platform benefits from a normalised onboarding experience rather than having to implement bespoke KYC flows for every processor. This reduces onboarding friction for merchants while ensuring the platform and its PSP partners remain compliant with their regulatory obligations.