LegitScript unveils automated KYB checks to boost onboarding

LegitScript has introduced two new enhancements to its merchant onboarding technology, focusing on automated business verification for payment facilitators, acquiring banks, and related companies.

The updates, Global Business Identity Check and U.S. Tax Identification Number (TIN) Verification, are designed to improve Know Your Business (KYB) processes. The aim is to allow organisations to verify merchants faster and with greater accuracy, addressing compliance as well as fraud prevention concerns across a broad range of geographies.

Industry challenges

Payment companies have long struggled with fragmented KYB solutions, especially when attempting to onboard merchants in multiple jurisdictions. Disparate data sources, vendor patchworks, and inconsistent processes have resulted in delays and compliance risks, an issue that has become more acute as fraud methods diversify and regulatory requirements increase.

"As fraudsters become more sophisticated and card networks tighten their requirements, payment facilitators, ISOs, and acquirers that cannot quickly validate merchant legitimacy across borders risk incurring fines, reputational damage, and lost revenue," said Tom Cook, Chief Product and Technology Officer at LegitScript. "By giving payments companies a unified way to automatically confirm business legitimacy, ensure compliance with government-sourced data, and accelerate verification across U.S. and international markets, we're helping them grow while reducing risk."

Global identity checks

The Global Business Identity Check enables registry-level verification in over 120 countries, leveraging official government and country-specific databases. With this capability, businesses can confirm whether a prospective merchant is legally registered and active, check name-match accuracy, and validate key business entity details in line with regulatory requirements.

By validating legitimate business status directly through government sources, the solution provides payment providers with the opportunity to reduce fraud, streamline onboarding, and ensure compliance without requiring separate workflows or third-party vendors for international checks.

US tax verification

The U.S. TIN Verification now integrates directly with Internal Revenue Service (IRS) records, letting payments companies instantly confirm alignment between a merchant's legal name and tax ID. This is designed to remove friction from underwriting processes and reduce the need to work with separate KYB vendors for domestic TIN validation.

Companies can use the same automated workflow to conduct both international and U.S. onboarding checks, helping them meet compliance obligations while securing faster processing and approval of merchant applications.

Reporting and workflow

The enhancements are included in LegitScript's KYB Checks module, which now enables clients to select relevant checks, upload business data once, and receive all verification results in a consolidated format. This streamlined approach supports approval automation and aims to give clearer, more actionable business legitimacy insights to payment companies and their bank partners.

The expanded Business Identity Check delivers additional information about prospective merchants inside and outside the United States, helping organisations efficiently assess merchant legitimacy and make better-informed decisions about onboarding and partnerships.

Client commentary

Stacie Wrenn, Director of Global Compliance at QorPay, noted the impact of the technology on operational efficiency and reliability in merchant onboarding and communications with sponsor banks.

"LegitScript helps QorPay make decisions much more efficiently by saving us anywhere from 20 minutes to several hours on each application. Their high-quality reporting and fast analysis have also helped reduce our response time for our sponsor bank's requests. When my merchant onboarding team or our sponsor bank knows the data is coming from LegitScript, they trust it."

With the ongoing pressure on payment firms to keep pace with evolving regulation and attempts at fraud, LegitScript's latest product adjustments focus on consolidating and automating core compliance activities. The solutions aim to replace complex vendor ecosystems and manual steps with a single, integrated KYB workflow, relevantly adjusted for organisations operating domestically and internationally.