Know Your Customer, usually shortened to KYC, means confirming that a customer, seller, partner or member is who they claim to be. Banks, NBFCs, payment companies and other regulated entities are required by law to perform KYC to defined standards. But many unregulated online businesses — marketplaces, platforms that pay commissions, rental services, B2B portals — also benefit from verifying the people they deal with.
Why KYC matters
Online, anyone can type any name and number into a form. Without verification, fake accounts multiply, payouts reach the wrong people and fraudsters exploit offers and credit. Verification protects your business, your genuine users and your reputation. It also builds trust: buyers feel safer on a marketplace where sellers are verified, and partners prefer platforms that keep out bad actors.
What is typically verified
- Identity — PAN, Aadhaar (only with the person's consent, typically through DigiLocker), driving licence, passport or voter ID.
- Bank account — that the account exists and the holder's name matches the person.
- Business details — GSTIN and company registration for business customers and sellers.
- Contact details — mobile number and email confirmed by OTP.
Manual versus automated verification
Manual verification means asking users to upload documents and having staff inspect them. It is slow, expensive, inconsistent and vulnerable to forged images. Verification APIs check the details against official or authoritative sources in seconds, returning structured results — names, statuses, dates — that can be matched automatically. Staff only review the exceptions.
When to verify
Verify at the moment it matters. Requiring every document at sign-up drives genuine users away; asking for verification before the first payout, before listing products or before a credit limit is granted feels reasonable to users.
Respect privacy
Collect only what you need, explain clearly why you need it, protect what you store and delete it when you no longer need it. Regulated entities must follow the specific KYC directions that apply to them; everyone should follow data protection good practice and applicable law.
Getting started
Identify the risks in your business — fake sellers, payout fraud, credit default — and choose the checks that address them.
See our KYC and verification APIs, covering PAN, Aadhaar via DigiLocker, bank, UPI, GST and more through one API key.
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