{"id":3169,"date":"2017-06-28T12:11:49","date_gmt":"2017-06-28T12:11:49","guid":{"rendered":"http:\/\/paymentfac.wpengine.com\/?p=3169"},"modified":"2021-09-03T14:23:24","modified_gmt":"2021-09-03T14:23:24","slug":"social-kyc-ignore-it-at-your-own-risk","status":"publish","type":"post","link":"http:\/\/infinicept.com\/payment-facilitator\/learn\/underwriting-risk\/social-kyc-ignore-it-at-your-own-risk\/","title":{"rendered":"Social KYC: Ignore It At Your Own Risk"},"content":{"rendered":"

Payment facilitators have many tools at their disposal to help them understand the risk of taking on a particular merchant\u2019s business during underwriting. In many cases, though, the tools rely on information provided by the merchants themselves. <\/strong><\/p>\n

To validate that information merchants have provided, however, PFs have a vast resource for fishing out the true nature of the merchant\u2019s business and the identities of the people involved. <\/strong><\/p>\n

A merchant\u2019s presence across various online forums and social media sites \u2013 their digital footprint \u2013 has emerged as a useful supplement to traditional underwriting practices.<\/p>\n

During underwriting, social media and other sites can help either validate a merchant\u2019s application or call into question what they\u2019re telling you, according to Marcus Smith, the VP of risk management for payments technology provider i3 Verticals.<\/p>\n

\u201cUltimately, they\u2019re going to cater to their true clientele. They want to draw that business to their doorsteps. So you\u2019ll see that, on social media, you may find links to individuals through phone numbers and addresses. They want those people to find them,\u201d Smith said.<\/p>\n

The investigation begins with the information given on the merchant application, according to Melissa Sutherland, director of merchant solutions for LegitScript. A merchant\u2019s presence on common platforms such as Facebook and LinkedIn can provide clues to whether their stated business is legitimate. What do their sites look like, and do they logically fit in with the information you\u2019ve been given?<\/p>\n

\u201cThe majority of the time, you\u2019re going to find awesomeness on all these platforms, but occasionally you\u2019re like, oh, that\u2019s probably something that I as a merchant provider don\u2019t want to be involved in, I don\u2019t want to move that money, or I\u2019m not allowed to move that money,\u201d Sutherland said.<\/p>\n

Other useful sites include Yelp, Pinterest, Instagram and Reddit \u2013 places where customers may be leaving reviews or merchants and their customers may be otherwise talking about the business.<\/p>\n

\u201cSocial media discussion boards are a wonderful forum to catch consumers of your merchant having a discussion about what the product actually is,\u201d she said.<\/p>\n

Verticals vary<\/strong><\/p>\n

In addition to verifying the business a merchant is in, leading PF WePay \u2013 which was an early adopter of using social media within underwriting \u2013 also uses it to help verify another important piece of information, according to John Canfield, the company\u2019s VP of risk.<\/p>\n

\u201cOne key part of underwriting is understanding, is this person that we\u2019re verifying truly the authorized representative of this business?\u201d he said.<\/p>\n

He described the use of a merchant\u2019s social media presence in underwriting as an important source of data within a wider underwriting program, but one that varies according to the vertical.<\/p>\n

\u201cEveryone is going to be doing KYC verification, but this is something where there\u2019s more variation,\u201d he said.<\/p>\n

A home contractor might not be expected to have a significant social presence, for example, whereas a marketing consultant likely would.<\/p>\n

But regardless of the vertical and the usefulness of social specifically, understanding an overall digital footprint is often very important.<\/p>\n

\u201cI think probably more and more people are turning to it as time goes on, just because if you want to offer a very good experience and easy onboarding to people but there are these bad actors out there, you have to take advantage of all of the data sources that you have,\u201d Canfield said.<\/p>\n

\u201cI would say, if you ignore it, you do it at your own risk.\u201d<\/p>\n

Applying a risk-based approach<\/strong><\/p>\n

Canfield also noted that the practice of researching a digital footprint is not simply about rooting out bad actors. More often, it is about providing a level of confidence that the merchant is indeed who they say they are and conducting the business they said they were conducting.<\/p>\n

Sutherland agreed. Even discrepancies or things that don\u2019t add up don\u2019t necessarily indicate nefarious activity, she said. A new product line can throw off risk models because it doesn\u2019t match up with the information gleaned in underwriting. Social media can be part of the investigation into what has changed.<\/p>\n

\u201cIt\u2019s about being able to weigh those factors together and filter out changing business models or growing businesses to, uh-oh, I really need to be very worried about what just happened in my merchant account,\u201d she said.<\/p>\n

Sutherland also cautions against \u201cbeing a caped crusader.\u201d When you\u2019ve found a thread, it\u2019s tempting to keep pulling it, she said, but It\u2019s important to balance chasing the bad guys with validating that your merchant is real and moving on.<\/p>\n

\u201cContinuously train your teams to understand when am I in a rabbit hole that is going to net results, and when am I in a rabbit hole because I can\u2019t help myself?\u201d she said.<\/p>\n

Smith agrees that a risk-based approach is best. Experience helps payment facilitators know which paths are worth going down and how to find the most relevant information, he said.<\/p>\n

Help is available from service providers as well.<\/p>\n

\u201cPayment facilitators have kind of blown up this old school notion of the way it used to be and revolutionized the way that just in time underwriting happens. The easiest way to do it with scale is to have solid, robust partnerships you can rely on,\u201d Sutherland said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Payment facilitators have many tools at their disposal to help them understand the risk of taking on a particular merchant\u2019s business during underwriting. In many cases, though, the tools rely on information provided by the merchants themselves.<\/p>\n

To validate that information merchants have provided, however, PFs have a vast resource for fishing out the true nature of the merchant\u2019s business and the identities of the people involved.<\/p>\n","protected":false},"author":21,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_FSMCFIC_featured_image_caption":"Image Source: Shutterstock","_FSMCFIC_featured_image_nocaption":null,"_FSMCFIC_featured_image_hide":null,"footnotes":""},"categories":[1024],"tags":[327,389,450,473,479,497,512,973],"class_list":["post-3169","post","type-post","status-publish","format-standard","hentry","category-underwriting-risk-learn","tag-frictionless-underwriting","tag-i3-verticals","tag-john-canfield","tag-kyc","tag-legitscript","tag-marcus-smith","tag-melissa-sutherland","tag-wepay"],"acf":[],"_links":{"self":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/3169","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/users\/21"}],"replies":[{"embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/comments?post=3169"}],"version-history":[{"count":2,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/3169\/revisions"}],"predecessor-version":[{"id":7642,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/posts\/3169\/revisions\/7642"}],"wp:attachment":[{"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/media?parent=3169"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/categories?post=3169"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/infinicept.com\/payment-facilitator\/wp-json\/wp\/v2\/tags?post=3169"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}