What KYB covers
The firm identifies and verifies the company, then looks through it to the people behind it.
- Legal existence: name, registration number, registered office and principal place of business.
- People in charge: in the UK, the full names of the board of directors and the senior persons responsible for operations.
- Ownership and control: the company's structure and its beneficial owners, with reasonable measures to verify them.
- Authority to act: anyone acting for the company is identified, verified and shown to be authorised.
- Purpose: what the business relationship is for, then ongoing monitoring of it.
The beneficial ownership threshold in the EU and the UK
- EU today: a shareholding of 25% plus one share, or an ownership interest of more than 25%, indicates ownership, and a Member State may set a lower percentage (Directive (EU) 2015/849, Article 3).
- EU from 10 July 2027: 25% or more of the shares, voting rights or other ownership interest, counted through every chain of holding companies (Regulation (EU) 2024/1624, Article 52).
- UK: more than 25% of the shares or voting rights, or control by other means (Money Laundering Regulations 2017, regulation 5).
Where no owner can be identified after every possible means, the senior managing official is treated as the beneficial owner and the firm records what it did. In the UK a firm may not rely solely on the information held by the companies registrar to identify beneficial owners (regulation 28).
Screening, and what changes on 10 July 2027
UK firms have procedures to determine whether a customer or its beneficial owner is a politically exposed person (regulation 35). The EU's AML Regulation applies directly in every Member State from 10 July 2027 (Article 90).
That regulation writes two checks into due diligence itself: whether the customer or its beneficial owners are subject to targeted financial sanctions, and whether they are politically exposed persons (Article 20). It also has companies give their beneficial ownership information to the firm that is onboarding them (Article 63).
Who carries out KYB
The duty belongs to the regulated firm that takes the business customer on, such as a bank, an e-money or payment institution, or an acquirer onboarding merchants. A company working under a partner's licence follows the partner's KYB policy.
KYB sets onboarding time for business products: company registers differ by country, and ownership can run through several holding companies. A product sold in both the EU and the UK sets the ownership threshold per market.
KYB, KYC or merchant underwriting?
- KYC
- Know your customer verifies an individual. KYB verifies a company and then the individuals behind it, and in law both are customer due diligence.
- Merchant underwriting
- In card acquiring, KYB is the anti-money laundering part. Underwriting adds the merchant's credit and chargeback risk.
- Beneficial ownership register
- A source for KYB, not a substitute for it. UK law bars relying solely on the registrar's information.
Where KYB shows up in a platform
Modules that do the work
- KYC / AMLIdentity checks, screening and ongoing monitoring, with the verification provider you choose.
- Merchant onboardingBusiness sign-up, verification and underwriting, from application to first payment.
- Compliance reportingTransaction monitoring, the Travel Rule and regulatory reports, ready for your regulator.
Platforms that need it
Guides that go deeper
- How to launch a business account with expense cards for SMEsThe account, the cards and the controls around them: what a business account with expense cards needs, from licensed partners and KYB to SCA and the interchange rules for commercial cards.
- How to become a PSP or a payment facilitatorGateway, acquirer, payment facilitator or payment institution: where the licence line falls, how the card schemes register payment facilitators, what merchant KYB demands, and the UK and UAE rules.
Where it is written
The laws and standards this page's facts come from.
- Directive (EU) 2015/849, the Anti-Money Laundering Directive, consolidated (EUR-Lex)
- Regulation (EU) 2024/1624, the AML Regulation (EUR-Lex)
- Money Laundering Regulations 2017 (legislation.gov.uk)
General information, not legal advice: what applies to you depends on your services and your market.