KYB (Know Your Business)

Where KYC asks “is this person who they claim to be,” KYB asks “is this company what it claims to be.” Payment providers must confirm that a merchant applicant is a legitimate, registered business before processing for it, both to satisfy anti-money-laundering obligations and to catch fraud patterns like shell companies created to run stolen cards or launder proceeds through fake storefronts.

How it works

KYB verification typically checks the legal entity name and EIN against IRS and state registries, confirms active registration with the secretary of state, and validates the business address. Beneficial ownership is established (who owns 25% or more), and those individuals go through KYC. The business itself is screened against sanctions lists, and card-network databases such as MATCH reveal whether the business or its principals were previously terminated by another acquirer. Beyond documents, practical KYB looks at what the business actually does: does the website exist and match the stated line of business, does the claimed MCC fit, do projected volumes make sense for the size of the operation? A “consulting firm” projecting $2 million a month in $30 average tickets warrants questions.

Why it matters

KYB quality is a leading indicator of a payment provider’s health. Providers that verify carelessly accumulate fraudulent and miscoded merchants, and the resulting losses and network fines eventually surface as frozen funds, sudden reserve demands, or program shutdowns that hit every merchant in the portfolio. For platforms, the integration question is the same as with KYC: can the checks run via API inside your onboarding flow, and how are edge cases resolved without losing the applicant?

QorPay performs KYB within its Automated Underwriting module on QorCommerce, so entity verification, ownership checks, and risk review happen in one boarding flow.