What are KYC and KYB?

1 July 2020

Business Insight

As part of their activity, marketplaces and crowdfunding platforms are required to comply with the KYC and KYB procedures, established by the ACPR. What are these procedures and what are their objectives? How can it be ensured that platforms comply with these sophisticated and highly supervised procedures? We can explain!


KYC and KYB: what you need to know

KYC or Know Your Customer is a mandatory procedure for companies to collect and verify information relating to the identity and integrity of their customers and partners.Established by the “Autorité de contrôle prudentiel et de resolution” – ACPR (French Prudential Supervisory Authority), the objective of the procedure is to prevent and avoid all risks of fraud, money laundering and financing of terrorism (AML/CFT).

While the term KYC is by far the most widely used, we talk about KYB (Know Your Business) when referring to the procedure for collecting analysis information relating to a company, or a legal person.

In concrete terms, the procedure translates into a list of official documents to be collected in order to guarantee the identity and integrity of the natural or legal person.

KYC & KYB for marketplaces and crowdfunding platforms

Since they connect sellers and buyers, or investors and project leaders, marketplaces and crowdfunding platforms fall within the scope of highly regulated activities. In effect, by carrying out collection operations on behalf of third parties, they are forced to create virtual payment accounts, which is similar to financial organisations. Monitoring vendors and financial flows is therefore essential.

Whether they are approved by the ACPR or benefit from the support of a Payment Service Provider, the KYC collection procedure remains a legal obligation, under penalty of criminal sanction or administrative penalty.

On the marketplace side, all sellers must therefore be submitted to KYC. For crowdfunding platforms, all actors have their identity verified before the validation of a payment account: investors, lenders, donors or even project leaders. The implementation of a KYC process thus meets the due diligence imposed by the regulations.

By using a PSP such as Lemonway, you get the benefit of support from a team of experts who take care of this verification procedure for you.


KYC and KYB: what documents need to be collected?


When creating a payment account, various pieces of information will be required from the account holder: their first name, last name, date of birth, nationality, country of residence and email address.

But to finalise the authentication of the account, a number of documents must be collected:

For natural persons

  • One of the following principal identification documents:
    • ID card
    • Passport
    • Residence permit
  • One of the following secondary identification documents:
    • Driving licence
    • Health Insurance card
    • Family record book
    • Marriage certificate
    • Birth certificate
    • Taxation notice less than one year old


For legal persons

In addition to an identity document of the legal representative of the company and that of all shareholders holding 25% or more of the company’s shares, a series of company specific documents must be collected:

  • KBIS (trade registry document) of the company less than 3 months old
  • Articles of Association dated and signed by the company’s legal representative
  • Document stating the company share allocation
  • Company RIB (banking information document)

ORIAS registration document or equivalent from your company’s country of registration in the following cases: IOBSP (intermediary in banking and payment services) for marketplaces; IFP (Crowdfunding Intermediate) for Crowdfunding Donation/Reward platforms and Crowdfunding Loan platforms; and CIP (Crowdfunding Investment Advisor) for Crowdfunding Equity platforms.


While the KYC may seem complex when examined from the point of view of the marketplace and crowdfunding platforms, it is the PSP which is responsible for its correct execution. Find out why the KYC has never been so easy & fast with Lemonway!