What it means
More than collecting an ID
A process can include identity verification, understanding a business customer and confirming representatives’ authority. The exact requirements differ by jurisdiction, provider, product and risk. Customer due diligence can also include ongoing review beyond the initial onboarding step.
Operational boundaries
A merchant should know which checks its provider performs and which duties it retains. Data collection must be purposeful and protected. Passing a provider’s onboarding check does not authorize every transaction, guarantee a customer’s behavior or provide a general certificate of legal compliance.
Related concepts
In practice
A concrete example
A business onboarding flow verifies an authorized representative and the relevant business information before enabling the requested account capabilities.
Technical notes & boundaries
FINRA Rule 2090 and FinCEN CDD rules have specific US scopes. Do not apply their exact requirements or thresholds to every country or merchant.
Go to the source.
Original references used for this definition. Product details and standards can change.