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Verification overview

Learn how Adyen verifies the users in your platform and which factors affect the information required from them.

As required by payment industry regulations, Adyen must verify the users in your platform before you can process payments, pay out their funds, and offer more financial products to them. These verification checks are also called Know Your Customer checks.

To start the verification checks, you must:

  1. Determine the verification requirements and the data that you need to collect from your users.
    The data depends on the country they are operating in, their legal entity type, the setup of your platform, and the financial products that you want them your users to have.
  2. Collect the data through Adyen's hosted onboarding or through your own UI.
  3. Create an account holder.

Adyen starts the verification process and informs you of the result through webhooks.

On this page, we describe general verification requirements and how the verification process works.

Country of operation

Verification requirements vary based on the country where your user is operating in. The requirements depend on the business regulations in that specific country. For example, in Belgium, a sole proprietorship is required to have a registration number, while this is not required in the United Kingdom.

See minimum required information for more details on the requirements for specific countries.

Legal entity type

Verification requirements vary based on the user's legal entity type. A legal entity can be a person or an entity, such as a public company or a nonprofit organization.

The user that holds a contractual relationship with your platform is the main legal entity. You must collect information about the main legal entity, and about other entities that are associated with this user. For example, if your user is a private company, you must also collect information about the owners of the company. You must create individual legal entities and link them to the company, the main legal entity that is conducting business with your platform.

The following tabs show the legal entity types and describe the general requirements for the data that you need to collect from them.

Supported in

Countries: All countries
Setups: Platform (default), Partner model

The entity is an organization registered in the country they are operating in.

An organization is further classified into the following types:

  • Private company: the organization is in the private sector and is owned and run by directors.
  • Listed public company: the organization is listed publicly and run by directors.
  • Nonprofit or charitable organization: the organization has an official status as not-for-profit or tax-exempt, sometimes called a non-governmental organization (NGO).
  • Incorporated association: the organization is a registered entity without profit that is organized around a purpose such as recreation, culture, or charity.
  • Incorporated partnership: the organization is formed through an agreement between two or more members.
  • Governmental organization: the organization is owned by the government or state.

In general, to onboard an organization, you must collect the following:

  • Legal name of the organization
  • Registration number
  • Registered address, and the principal place of business if different from their registered address
  • The ultimate beneficial owners, control officers, and signatories
  • Bank account for payouts

Ultimate beneficial owners, control officers, and signatories

As part of the checks for an organization, Adyen also verifies the identity of all individuals that are associated with the organization. We refer to these individuals as ultimate beneficial owners (UBOs) through ownership or control, and signatories. The table below describes the criteria for identifying them, and the minimum required number for each.

Who Criteria Required number of individuals
UBOs through ownership Individuals who directly or indirectly own 25% or more of the total shares, voting rights or other equity in the organization. Between zero to four. Adyen requires information about all individuals that fit the criteria.

If no one owns 25% or more of the organization, then your user must provide information about a UBO through control.
UBOs through control Any individuals who exercise ultimate effective control in making decisions for the whole company. If such an individual cannot be identified, then members of senior management must be identified as UBOs through control. At least one. This is required if no one fits the criteria of UBO through ownership or if your user is operating in the U.S.
Signatories Officers or representatives who legally represent the organization towards Adyen and are authorised to enter a binding agreement with Adyen on behalf of their organization. At least one. All Signatories are required to be identified.

Setup

Verification requirements vary based on if your platform is the merchant of record (MoR) or if your users have a direct relationship with the card schemes. Before you start your integration, your Adyen contact will discuss with you the type of setup that applies to your platform.

Each setup includes capabilities. A capability is an action that a user can do in your platform.

The following tabs show the setups and the general requirements for the data that you need to collect from them.

Availability

Countries: All countries
Legal entity types: All types

Your platform is the merchant of record (MoR). Marketplaces are typically merchants of record.

You must collect the minimum required information from your users. Once they pass the verification checks, you can start processing payments and payouts for them.

The following capabilities are available for users.

Capability The user can...
receiveFromPlatformPayments Receive funds from split payments.
receiveFromBalanceAccount Receive funds from other balance accounts in your platform. This is only required if the balance accounts are not under the same account holder.
sendToTransferInstrument Transfer funds to verified bank accounts. For example, when paying out to bank accounts.
sendToBalanceAccount Transfer funds to other balance accounts in your platform. This is only required if the balance accounts are not under the same account holder.

Financial products

Verification requirements vary based on the additional financial products that you want your user to have. The setup of your platform already includes processing payments and payouts. Adding more financial products, such as business accounts or card issuing, requires more verification checks.

Each financial product includes capabilities. A capability is an action that a user can do in your platform. Different financial products may have overlapping capabilities. For some financial products, such as card issuing, capabilities may also have different levels.

The following tabs show the financial products and the general requirements for the data that you need to collect from them.

Availability

Countries: Limited (currently onboarding in the Netherlands)
Legal entity types: Organizations with UBOs who are tax residents in the EEA, sole proprietorships

With Adyen for Platforms, you can create an equivalent of a bank account, which we call a business account. Business accounts require additional verification checks.

In addition to the minimum required information based on the country and legal entity type, you must also collect the following:

  • Industry in which the user is doing business
  • Sales channel where the user sells their goods or services
  • URL of the user's website if they have an online presence
  • The user's source of funds
  • For organizations, their Foreign Account Tax Compliance Act (FATCA)/Common Reporting Standard (CRS) classification, which includes their business type and their main source of income.
  • Tax residence country and ID number. This is required for organizations and the individuals associated with the organization.
  • The user's source of wealth (conditional). Adyen determines if your user needs to provide data about their source of wealth and/or of the owners or controllers of the organization. If the source of wealth is required, Adyen informs you through email.

For details, see additional requirements for business accounts.

The following capabilities are available for users.

Capability The user can...
issueBankAccount Have an Adyen business account.
receiveFromThirdParty Receive funds from third parties. This capability is allowed by default when they have an issueBankAccount capability.
sendToThirdParty Send funds to third parties. This capability is allowed by default when they have an issueBankAccount capability.

Verification process

After you submit your user's data and create an account holder for them, Adyen starts the verification process. You can ask Adyen to configure default capabilities for each newly created account holder. When you create an account holder, these capabilities are requested for them by default.

If a user needs to have a specific capability that is not part of the default configuration, you need to request the additional capability.

How it works

The following diagram illustrates the verification process.

  1. You create an account holder for your user and capabilities are requested for them by default. If you want them to have a capability that is not part of the default configuration, you can also request the specific capability.
  2. Adyen checks if there are verification requirements with which your user must comply. If there are any, Adyen runs the verification asynchronously. Adyen sends all verification-related updates through webhooks.
  3. If the verification fails, the user can retry the verification by providing new or revised legal entity information. They can also provide additional documents.

If the verification is successful, the user is allowed to use the capability. Once a capability is allowed, you can still control the use of the capability by deactivating it.

Next steps

Find out which information your users need to provide.