While customer identity verification has always been a basic policy among banks and other financial institutions, it is now a mandatory e-commerce requirement. The need to know, and not just verify the credentials presented by a customer is now the better practice. Mainly because of the global nature of the financial transactions that bring money in and out of economies. Today, the policy and its related processes are called Know-Your-Customer or KYC.

The first identity verification technology was developed and introduced in the U.S. in the 1990s. However, the investigations of the 9/11 attacks made it clear that verifications should include allowing regulators to track who and from where financial transactions originated. In addition, the international anti-money laundering law adopted by every country became stricter, as its objectives came to include anti-terrorism and other illegal activities that could destabilize governments.

Whereas before, it was enough to ask customers or clients to present any kind of credentials as proof of identity and address, customers or clients are now required to submit credentials considered as valid identification documents. KYC now employs software that enables verifiers to cross-check identification information with independent and well founded sources of data in any jurisdiction or country. That is why valid IDs are those issued by a government, as the photograph and information can be checked against a corresponding database.

Reasons Why KYC Verification has Become a Standard e-Commerce Requirement

As e-commerce has become the new norm by which businesses and consumers interact, the integration of KYC software in various online platforms has become necessary.

First off, a KYC software streamlines the onboarding process of consumers or subscribers signing up to become regular patrons or users of an online business. A reliable KYC software can complete the verification process in a matter of seconds, whilst providing the business with a complete basis for assessing risks related to every customer or subscriber.
Determining such risks will also aid an online business in implementing mitigation measures to avoid the following:
Entanglement with unscrupulous individuals engaged in identity theft.
Having links to persons who are under the watchlist of governments as suspected money launderers or mobilizers of funds used by terrorist groups.

Criminal elements looking to use an online business in carrying out illegal activities like smuggling, drug dealing, racketeering, human trafficking and other similar criminal activities.

Example of an Online Business that Makes KYC Mandatory


An example of an online business that makes KYC a mandatory procedure for onboarding new members is JAA Lifestyle. This website offers individuals financial opportunities to earn a steady stream of income just by watching at leas 60 ads per day. However, the business also thrives by growing its membership in order to increase the number of businesses it supports by way of ad viewership.

Members can earn additionally by recruiting individuals who will form part of their team.

Although the website does not require the payment of monthly dues in exchange for the use of their platform, the site requires a one-time fee for KYC processing. Once a member’s identity verification passes all points of assessments, he or she can join the network of ad viewers by accessing his or her account via the JAA lifestyle Login page.