Article 4 min

KYC & KYB Together Can Fuel Marketplace Global Expansion

KYC & KYB for Marketplaces

Online marketplaces expanding their global presence can face complex regulatory and onboarding challenges as they enter new regions.

Vendor onboarding often tops the list of challenges. Regulations might require marketplaces vet those vendors, or it could be a step toward ensuring a trustworthy and safe place to do business. 

Business onboarding takes different forms depending on marketplace needs and the audience in different regions. But marketplaces can face delayed expansion and higher costs when they don’t have a sound business onboarding approach in place prior to entering a new region.

There are obstacles to finding that approach. Deep expertise in one market might not apply elsewhere. Businesses of different sizes often require different onboarding strategies. Business data for verification can come from multiple sources that provide information in different formats.

Marketplace Expansion Checklist

A Checklist for Market Expansion

The gig economy has led to an increase in online sellers. Individual entrepreneurs and sole proprietorships often have little or no business data, which makes them difficult to vet. 

Different markets also pose unique challenges. For example, addresses in France don’t always follow a standardized system and can be difficult to verify. In Brazil, tax IDs are more important than business registry numbers. In the U.S., the jurisdiction of incorporation is crucial for verification because each state operates its own registry.

Online marketplaces don’t have to overcome those challenges on their own. The Trulioo person and business verification platform can help marketplaces verify merchants in markets across the globe.

Here are strategies marketplaces can use to accelerate expansion.

Assemble Cross-Functional Stakeholders

Product, compliance, and fraud and risk teams have different requirements during expansion. Collaboration among those stakeholders delivers insights, helps achieve buy in and speeds the process along.

Identify Regional Regulations, Due Diligence Requirements and Data Reporting Guidelines

Data guidelines vary by country and region, so it’s critical to understand the reporting requirements. Regulations also vary among countries, making it crucial to have flexible onboarding systems that can adjust quickly to shifting requirements.

Determine Regional Data Requirements for Risk Management

Fraud attack vectors continually evolve, and each market has unique threats. It’s critical to have a clear understanding of those threats to inform a risk-based approach catered to each region.

Research Regional Onboarding Expectations for User Experience

A quick, smooth business onboarding experience helps prevent abandonment, build positive relationships with suppliers and establish a competitive advantage. Those experiences are based on business onboarding workflows – customized for the market, language, use case and merchant – that enable the right mix of security and speed.

Set a Budget for the Cost of Onboarding Verified Sellers

Not all sellers are the same, and each brings a different value to a marketplace. When marketplaces balance the levers of verification rates, response times and transaction costs, they can optimize the cost of onboarding ideal sellers.

Confirm Regional Data Sources and Regulations

Business types, regulatory requirements and data sources vary across markets. Marketplaces can accelerate expansion by understanding the data they need for verification and where they can get it.

Design Onboarding Workflows with Routing for Sole Proprietors and Incorporated Businesses

Sole proprietor verification often requires Know Your Customer (KYC), rather than Know Your Business (KYB), checks. Workflows that provide KYB with routing to KYC can accelerate onboarding and provide ultimate beneficial owner verification for larger businesses.

Consolidate and Standardize Data

Organizations that operate across borders often need to integrate multiple data sources. Different data formats in different languages can lead to costly manual reviews. A holistic approach with standardized data helps reduce bottlenecks and achieve accurate verification.

Trigger Additional Screening for Higher-Risk Cases

When marketplaces gain a deep understanding of platform sellers, their transaction volumes and compliance risks, the organizations can create automated workflows that accelerate onboarding for low-risk scenarios and trigger additional due diligence for higher-risk cases.

Elevate Expansion Opportunities

Many online marketplaces have successfully developed their brand in one region and are ready to expand their reach. With the right tools, data and local expertise, those marketplaces can enter new regions, onboard new sellers and reach a global audience.

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