KYB, or Know Your Business, is a due diligence process focused on verifying the authenticity and legal standing of a business entity, an essential step when onboarding merchants. While it shares principles with Know Your Customer (KYC), KYB specifically targets business structures rather than individuals. It involves confirming company registration, reviewing business licenses, validating operational addresses, and  crucially  identifying key individuals behind the business.

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A core part of KYB is uncovering Ultimate Beneficial Owners (UBOs) who are the individuals who hold significant control or ownership stakes in the company. This ensures transparency and helps payment providers avoid engaging with shell companies or entities involved in illegal activities.

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For example, when vetting a new merchant, a payment service provider might review corporate filings, confirm the identities of executives, and screen them against global watchlists or sanctions databases. KYB safeguards the financial ecosystem by ensuring that every merchant onboarded is a real, law-abiding business  not a cover for fraud, money laundering, or other illicit operations. When paired with KYC, KYB offers a complete picture of both the business and the people behind it.

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