Identity verification for Custom accounts

Identity verification of Stripe accounts you manage is an important—and required—step toward reducing risk on your platform when using Connect.

Every country has its own requirements that accounts must meet to be able to pay out funds to individuals and companies. These are typically known as “Know Your Customer” (KYC) regulations. Regardless of the country, the broad requirements are:

  • Collecting information about the individual or company receiving funds
  • Verifying the information is accurate

Connect platforms collect the required information from users and provide it to Stripe. This may include personal information and a scan of a government-issued ID. We’ll then attempt verification, asking for more information when needed.

This page explains the verification flow options, but the easiest way to manage verification is to integrate Connect Onboarding, which lets Stripe take care of the verification complexity. Handling the details of verification yourself is not only complex initially, but requires ongoing maintenance because of changing regulations around the world.

If you choose to handle the details yourself, read on to learn more about the verification flow options, how our API fields translate to both companies and individuals, and how to localize information requests. You should also read our Handling Identity Verification with the API guide to learn how to programmatically provide information and handle requests.

Verification requirements

Verification requirements vary depending on:

  • The country the connected account is in.
  • The capabilities the account has.
  • Whether the business entity is a company or an individual.

Typically, there are two sets of information that needs to be collected and verified. The first set enables charges and the second set enables payouts. For example, to enable charges for a company in the U.S., you might need to collect:

  • Information about the business (e.g., name, address).
  • Information about the person opening the Stripe account (e.g., name, date of birth).
  • Beneficial owner information (e.g., name, personal address).

The second set of information (typically required for connected accounts in the U.S.) enables payouts and needs to be collected after certain thresholds are reached. These thresholds vary, but they often have a processing element and a time element. For example, after 30 days from the first charge or after $1,500 (USD) in charges are created (whichever comes first), Stripe requests this second set of information. Using the previous example, this additional information might include:

  • The last four digits of an owner’s social security number
  • A scan of an ID document

Onboarding flows

As the platform, you need to decide if you want to collect the required information from your connected accounts upfront or incrementally (incremental onboarding). Some pros and cons for each method are listed below.

  Upfront onboarding incremental onboarding
Pros
  • A single request for information (normally)
  • Fewer problems in receiving payouts
  • Weeds out potential fraudsters
  • Fastest way to start
  • Higher onboarding rate
Cons
  • Some legitimate users may turn away
  • If not done properly at first, you'll still need to ask for more information later
  • Need to request and provide information later
  • Users may be bothered by repeated requests
  • More likely to see delays in receiving payouts

To help you determine which flow to build, review the required information for the countries your connected accounts will be in. Requirements vary depending on the country, so one flow might fit your business better depending on the location of your connected accounts.

Business type

The specific KYC information required depends on the type of business entity involved. They are:

  • individual — Collect information about the person.
  • company — Collect information about the company. Depending on the countries your connected accounts are in, you might also have to collect information about beneficial owners.
  • non_profit (available for U.S. connected accounts only) — Collect information about the non-profit organization.
  • government_entity (available for U.S. connected accounts only) — Collect information about the government entity.

See Required verification information for a list of requirements for different business types by country. When you know what information to collect, you can read more about handling identity verification with the API.

Business structure U.S. only

For all business types other than individual, you can further classify your user’s business by identifying its legal (business) structure. A business structure describes the details of a business entity such as day-to-day operations, tax burdens, liability, and organizational schema. You can classify by using company[structure] in the Account object.

Providing this information to Stripe gets you the most accurate business classification for compliance purposes. While not required, this information might reveal you have fewer onboarding requirements to collect. For example, owner information is required for private companies, but not required for public companies. By default, a company is considered private if information on the company[structure] is not provided.

Companies

Below describes the different business structures you can classify a company with. Refer to the U.S. required verification information section for more details on requirements.

If you or your users think the entity type should be company but are unsure, the information might be in the business formation documents or tax documents for that entity.

Business structure Description
multi_member_llc A business with multiple owners or members and is registered in a U.S. state as a Limited Liability Company (LLC).
private_corporation A business incorporated in a U.S. state and is privately owned. It does not have shares that are traded on a public stock exchange. It is also called a closely-held corporation. If you are a single-member LLC that has elected to be treated as a corporation for tax purposes, use this classification.
private_partnership A business jointly owned by two or more people and created through a partnership agreement.
public_corporation A business that is incorporated under the laws of a U.S. state. Ownership shares of this corporation are traded on a public stock exchange.
public_partnership A business that is formed by a partnership agreement with one or more people, but has shares that are publicly traded on a stock exchange.
single_member_llc A business entity that is registered with a U.S. state as a limited liability company (LLC) and has only one member or owner.
sole_proprietorship A business that is not a separate legal entity from its individual owner.
unincorporated_association A business venture of two or more people that does not have a formal corporate or entity structure.

Non-profits

Below describes the different business structures you can classify a non_profit with. Refer to the U.S. required verification information section for more details on requirements.

Business structure Description
incorporated_non_profit An organization incorporated under the laws of a U.S. state and has obtained tax-exempt status as a non-profit entity under either state or federal law (e.g., 501(c)(3)).
unincorporated_non_profit An organization that is pursuing an objective other than profits, such as a social cause, and has obtained tax-exempt status in the U.S. under either state or federal law (e.g., 501(c)(3)) but has not formally incorporated.

Government entities

Below describes the different business structures you can classify a government_entity with. Refer to the U.S. required verification information section for more details on requirements.

Business structure Description
government_instrumentality An organization formed by a government statute or body based in the U.S. to perform a certain function, but not the actual government body itself.
governmental_unit A branch of the state, local, or federal government of the U.S.
tax_exempt_government_instrumentality An organization created by or pursuant to government statute and operated for public purposes. It has obtained federal tax-exempt status under state or federal law (e.g., 501(c)(3)).

Internationalization and localization

If you support users in multiple countries, you’ll need to consider internationalization and localization when asking for information. Creating an interface that uses not only the user’s preferred language but also the proper localized terminology results in a smoother onboarding experience.

For example, instead of requesting a business tax ID from your users, regardless of country, you should request:

  • EIN, U.S.
  • Business Number, Canada
  • Company Number, UK

You can find recommended country-specific labels along with the other required verification information.

Further reading

Now that you've learned the basics of identity verification, you may want to read:

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