Whilst innovation in consumer facing Fintech is occurring constantly, the same cannot unfortunately be said for innovation in Payment Service Providers (PSPs) back office automation systems.
An area that continues to frustrate progress is the due diligence associated with merchant onboarding by PSPs. This is especially the case in the verification of key controllers, consisting of Ultimate Beneficial Owners (UBOs), officers, directors and other stakeholders.
PSPs are obligated under AML regulators to identify and verify not only the corporate structure of merchant entities to whom they intend to provide services, but also, shortly, under the 4AMLD to both identify and verify the natural persons who are key controllers associated with that merchant. Key controllers are usually identified as part of a conventional database search on the merchant, either through a data broker or direct with the registrar of companies in each jurisdiction. The difficulty has then been in verifying the natural persons who have been identified under a database search as being key controllers, which usually results in a frustrating slow manual process.
Up until now, PSPs have had one of two options to verify key controllers of their merchants, being by either face to face or by requesting the person to have their identity documents certified, posted and then processed manually by the PSP. Both of these options have caused time delays and frustration for those having to perform Know Your Customer (KYC) due diligence, as well as for the merchant and their key controllers.
Whilst face to face checks are still part of the onboarding process for merchants, it is unlikely that the merchant will be able to arrange for all their key controllers, especially their UBOs, to attend a face to face KYC process with a representative from the PSP.
The use of certified documents is still predominant, and it is usually performed in conjunction with comparing some of the key controller’s information to a government regulated database, such as a credit reference agency or an electoral roll. For PSPs this option provides the reach face to face can’t, but the challenge is that it can take days and if not weeks to encourage the key controller to get their documents certified, and then wait to receive them in the post, before the PSP’s back office can manually check the application.
Furthermore, it’s usual that the key controllers are unable to complete the process contemporaneously, as there are the usual issues of travel, holidays, being domiciled overseas, documents not being available, together with the time, effort and cost associated with arranging for the certification of documents by the person.
So, is there a more efficient way to remotely KYC a natural person, irrespective of where they are domiciled or even if they are travelling?
iSignthis has adapted its consumer facing digital KYC service to verify the natural persons who are the merchant’s key controllers, including UBOs, directors, officers and other stakeholders, to meet AML/CFT regulations. iSignthis uses it patented technology to unlock the identity in a payment instrument, in order to meet enhanced due diligence requirements, as a means to identify natural persons, and thus verify key controllers of merchants. Our digital KYC service is able to verify key controllers in as little as 3 to 5 minutes, offering PSPs a fast and efficient way to verify key controllers, and thus on-board merchants.
Global payments expert, Ixaris are now live and transacting with the iSignthis merchant onboarding system to improve operations, cut costs and provide a more efficient process for the key controllers/UBOs of their merchants. The service provides Ixaris with the means to verify the key controllers of merchants, including travel agents and other partners, that use, resell or promote the Ixaris payment service.
If you are a PSP and seek a solution to the complexity of verifying your merchant’s key controllers/UBOs, please get in touch with us today at sales@isignthis.com.
About John Karantzis
John Karantzis is founder and Managing Director/CEO of Australian Securities Exchange listed iSignthis (ASX : ISX). John holds qualifications in engineering (University of Western Australia), law and business (University of Melbourne; University of Melbourne Business School). With over 20 years of experience spanning a number of sectors, he has a broad understanding of international regulatory regimes as they relate to payments and identity.
About iSignthis
iSignthis Ltd (ASX : ISX) is the global leader in dynamic, digital AML/CFT KYC identity proofing. Our Paydentity® solution incorporates real time electronic verification which converges authenticated remote payments with Know Your Customer (KYC) verification. By converging payments and identity, iSignthis delivers regulatory compliance with automated customer on-boarding. We offer a global reach of any of the world’s 3.5Bn financially included or “banked” persons. iSignthis’ unique solutions protect both online customers and merchants from fraud and identity theft, and thus increase confidence and trust by all parties involved in remote transactions.
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