KYC, or Know Your Customer, is a key compliance requirement that focuses on verifying the identities of customers during the onboarding process. It involves collecting and authenticating personal and business details such as legal names, addresses, identification numbers, and official documentation to confirm who the customer is and whether they pose a risk.

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The core aim of KYC is to safeguard the financial system from threats like fraud, money laundering, and illicit financing by ensuring that payment providers and financial institutions understand exactly who they are working with. For example, before approving a merchant account, a provider may request official ID from the business owners and validate business registration data to ensure the enterprise is legitimate.

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KYC isn't limited to a one-time check; many organizations continue to perform ongoing KYC or continuous monitoring, which involves tracking changes in customer behavior or newly emerging risks over time. In essence, KYC is not just a regulatory checkbox, it's a cornerstone of secure, compliant, and trust-based onboarding.

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