Multi-vendor marketplaces facilitate a high volume of transactions between sellers and buyers who, in most cases, never meet in person. In this context, it’s essential to clearly identify every party involved. This is where two key processes come into play: KYC (Know Your Customer and KYB (Know Your Business - Know your business).

Far from being just best practices, these are regulatory requirements. They ensure the security, transparency , and legal compliance of your platform. As a marketplace operator, it’s therefore crucial to understand these obligations and implement them effectively.

Why is KYC Essential (and Legally Required)? 

The KYC is especially relevant in B2C and C2C environments. It involves verifying a user’s identity before they can buy or sell on a platform. This step is legally required in many countries and primarily aims to combat fraud, money laundering, and terrorist financing.. 

  • Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT): In a digital environment, it’s not always clear who you're dealing with. KYC enables platforms to collect and analyze the necessary data to identify users, making it easier to detect suspicious activity and ensuring compliance with international AML/CFT regulations.
  • Protecting Consumers: Verifying the identity of users or businesses creates a more trustworthy environment. KYC ensures that accounts are legitimate and that the individuals or entities behind them actually exist.
  • Transparency and Accountability: The information collected through KYC is transmitted to and reviewed by the payment service provider (PSP). This process provides valuable traceability—especially in the event of a dispute—and strengthens the accountability of all parties involved in the marketplace.

KYB: A Legal Cornerstone for Securing B2B Transactions

Just like KYC, KYB processes focuses on verifying the identity of companies operating in your marketplace. This process is especially critical in B2B environments, where transaction volumes and stakes are significantly higher.

  • Regulatory Compliance: KYB ensures that every business active on your platform complies with both local and international legal and tax obligations . This contributes to the overall compliance of your marketplace and helps you avoid potential penalties.
  • Fraud Prevention: By thoroughly verifying business identities, you significantly reduce the risk of dealing with fraudulent or shell companies. A strong KYB process protects your platform as well as your professional user base.
  • Transparent and Trustworthy B2B Exchanges: Properly identifying companies builds trust-based business relationshipsand ensures clear traceability of B2B transactions.

To increase the reliability of your KYC/KYB checks, you can incorporate an enhanced due diligence, which involves a deeper analysis of the company. This allows you to assess key aspects such as:

  • Business solvency: It’s best to onboard sellers who can fulfill orders over the long term. The same applies to buyers—by analyzing their basket size, for example, you can confidently offer deferred or installment payment options. 
  • Reputation and criminal record: Onboarding a company with a problematic background could harm your marketplace’s credibility. Due diligence helps you select partners that align with your platform’s values.
  • VAT compliance: Marketplaces are now required to provide transaction summaries to both sellers and tax authorities. KYB supports this process and plays a key role in preventing VAT fraud..

How to Implement KYC and KYB Verification Processes 

While your platform must be able to identify the users operating on it, it does not carry out the KYC/KYB checks directly. Its role is to collect the necessary documents and transfer them to a Payment Service Provider (PSP), which is responsible for:

  • analyzing the submitted documents,
  • verifying their authenticity,
  • and ensuring compliance with financial regulations.

The marketplace facilitates the process, but the PSP ensures its validity and compliance.

To avoid friction, it’s essentialto integrate KYC/KYB collection during seller onboarding. This approach enables: early verification, faster account activation, and a better user experience from day one.

The SaaS solution from RollingFunds allows marketplaces to set up customized workflows to streamline and automate the entire process: collect the right documents at the right time, track verification progress in real time the progress of the audits, , and ensure full compliance—without technical complexity for the platform.

All with a clear view for your teams and your sellers at every stage.

Curious about how to implement a KYB process for your marketplace or which documents to collect? Get in touch—we’d be happy to help.

What Documents Are Required for KYC / KYB Verification? 

For Individuals (KYC): 

As part of the KYC (Know Your Customer), double identity check is generally required:

  • One primary identity document, such as:
    • National ID card
    • Passport
    • Valid residence permit
  • One secondary document, such as:
    • Driver’s license
    • Health insurance card
    • Bank card (in specific cases)

Good to know: KYC verification is often seamless for the user. It can happen automatically during account creation, the first transaction, or through certain payment methods that support instant identity checks.

For Businesses (KYB): 
Real Example: How KYB Works on a MarketplaceThe KYB processes to establish the company’s identity and structure. Commonly required documents include:

  • Identity document of the legal representative
  • Identity documents (or reference information) of any shareholder holding more than 25% of the company’s shares
  • Kbis - A company registration certificate (e.g., Kbis in France or equivalent), dated within the last 3 months
  • A shareholding structure document, such as the latest articles of association or a list of shareholders
  • The company’s bank account details (e.g., bank statement or IBAN) of the company

These documents allow the Payment Service Provider (PSP) to verify the company’s legal existence, structure, beneficial ownership, and eligibility to perform online transactions.  

Real Example: How KYB Works on a Marketplace

Implementing a KYB processes involves several key players: the seller, the KYB system, the marketplace operator, and the Payment Service Provider (PSP). Here's how the process typically unfolds, step by step: 

1. Seller Side: Uploading Documents

From their seller dashboard (back office), the business uploads the required documents for identity verification, such as:

  • A company registration certificate (e.g., Kbis in France)
  • The identity document of the legal representative
  • A shareholding structure document (e.g., up-to-date articles of association or shareholder register)

These documents are automatically transmitted to the PSP via the platform.

2. Marketplace Side: Initial Review and Collection 

The marketplace operator is responsible for: collecting the documents via the seller interface, performing a preliminary check to ensure completeness, legibility, and consistency, and forwarding the full set of documents to the Payment Service Provider for regulatory validation.

3. PSP Side: Analysis and Compliance Checks

The PSP’s compliance teams: review the documents received from the marketplace, verify the seller’s identity and company structure, and ensure everything complies with legal obligations related to Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT). 

4. Validation and Account Activation

Once the verification is complete and approved: the PSP opens the seller’s payment account, and the seller can now receive funds from sales on the marketplace—fully compliant with regulations. 

Setting up a robust KYB process means: securing financial flows on your marketplace, building trust with users and partners, meeting legal and regulatory requirements, and creating a safe, reliable, and sustainable environment for all stakeholder.. 

KYC & KYB at a Glance 

The processes KYC (Know Your Customer) and KYB processes are not just security measures—they are essential legal requirements that help build trust around your marketplace and secure relationships with financial partners..

Implementing these checks allows you to: effectively combat fraud, money laundering, and terrorist financing, ensure your marketplace remains compliant with regulations, and reinforce the credibility and reliability of your business ecosystem. regulatory compliance your marketplace and promote the credibility of your commercial ecosystem. 

Collecting and verifying this information can be time-consuming, especially at scale. With a SaaS solution like RollingFunds, you can provide sellers with a clear interface to track missing documents,automate reminders and document checks, andspeed up onboarding and ensure real-time tracking of compliance status. 

Important: This information must be kept up to date as long as the seller remains active on your platform. Automating this process is therefore essential to save your team time and maintain long-term compliance.