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Comment by skrebbel | Hacker News Reader

I had to look this up, sharing so it might help others: Apparently "KYC" means "know your customer", and it is some sort of vetting process done by payment providers.

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Know Your Customer is performed at different levels for different requirements. You can KYC individuals or businesses. For individuals, there is a Level 2 check which verifies a government issued document and a selfie holding the document. There is also a Level 3 check that includes verifying a proof of residence document like a bank statement or utility bill. The end result is reasonable confidence the individual is a legal resident of a specific jurisdiction. There is also eKYC which is a credit history and other data sources check but you don’t actually process any documents.

Anti Money Laundering is a ongoing process where you subscribe to a service that searches and monitors different lists for the name and birth year of all your customers. It raises a flag for a fuzzy match. The lists range from sanctions and terrorism which should immediately freeze the customer account, to adverse media such as financial crimes which is a judgement call depending on your service, to politically exposed persons or PEP which means to be cautious about transactions that could be improper use of public funds.

As long as an individuals payments dont exceed $10,000/yr, there is no reporting?

Why on earth was this downvoted?

I don’t know. In my case for screening investors there is mandatory reporting.

There can be. Fraudsters can try to get around the $10k reporting threshold by sending smaller amounts across multiple transactions. This is known as "structuring", and if detected, requires the filing of a FINCEN Suspicious Activity Report.

You will never be told if any of your transactions are being reviewed. This is done so as to not tip off potential fraudsters.

Basically identification and risk assessment to help identify and prevent fraud, money laundering, etc. These are government requirements which all sorts of finance business have to follow.

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