KYB
Know Your Business
KYB (Know Your Business) is the verification of a corporate client: its registration, owners, business activity and risks before the relationship begins.
What is KYB (Know Your Business)?
KYB is a set of checks on a client company before it is given an account, accepted as a merchant or signed to a partner agreement. If KYC answers the question "who is this person", KYB answers "what is this business, who actually controls it, and how risky is it".
## How it works
The check usually includes reviewing incorporation documents and registry extracts, identifying ultimate beneficial owners (UBOs) and directors, examining the ownership structure (including multi-tier structures with holding companies in other jurisdictions), analysing the declared business activity, website and business model, screening against sanctions lists and PEP lists, and assessing the financial profile and source of funds. The result is a risk rating, which determines how deep the ongoing monitoring or enhanced due diligence (EDD) will be.
## Where it applies in high-risk verticals
In fintech and payments, KYB is carried out by the PSP, acquirer or payment aggregator when a merchant is onboarded, especially in high-risk MCCs. In crypto, KYB is mandatory for exchangers, OTC desks and providers subject to AML and travel rule requirements. In gambling, KYB applies to operators and suppliers: providers check contractor companies, payment partners and the owners of licensed brands, as well as whether a valid licence exists in the jurisdiction under which the business operates.
## What it affects
KYB results decide whether a merchant is approved, what transaction volume limit and reserve it receives, which MCCs and descriptors it may use, and how often its profile is reviewed. Weak KYB leads to higher chargeback rates and regulatory complaints, as well as frozen funds and contract termination after launch.
## Common mistakes
Only the legal entity is checked and the ultimate beneficial owners are never reached. Outdated registry extracts are accepted without being compared against the current register. The declared activity is not matched against the actual website and traffic. KYB is treated as a one-off procedure, although owners, licences and business models change, so periodic review is necessary.
FAQ
How does KYB differ from KYC?
KYC verifies the identity of a natural person, while KYB verifies a legal entity: its registration, owners, activity and risks. In practice both processes are often run together, because behind every company there are always natural persons who are its beneficial owners.
Which documents are usually requested for KYB?
Typically these are a registry extract, incorporation documents, data on directors and beneficial owners, a description of the business, the website or product presentation, licences where they exist, and confirmation of the source of funds. The exact set depends on the jurisdiction and the policy of the specific provider.
Does KYB need to be repeated after onboarding?
Yes. Owners, licences, geography and the business model can change, so providers conduct periodic reviews and additional checks when risk signals appear.