Skip to content

kyc-verification.md

Latest commit

 

History

History
74 lines (52 loc) · 3.55 KB

kyc-verification.md

File metadata and controls

74 lines (52 loc) · 3.55 KB
Raw

KYC Verification Guide

KYC provider integration

KYC integration connects the platform to a third-party identity verification service.

Key integration points:

  • Provider API endpoint: the URL used to submit verification requests and fetch results.
  • API credentials: secure API keys or tokens stored in environment variables such as KYC_PROVIDER_API_KEY.
  • Provider configuration: option flags for document types, identity sources, country-specific rules, and risk scoring.
  • Error handling: handle provider rate limits, network failures, and invalid responses gracefully.

Providers may also support webhook callbacks, file uploads, and multi-step verification flows.

Customer verification workflow

A typical verification workflow includes:

  1. Collect information: gather user identity details and required documents (ID, selfie, address proof).
  2. Create verification request: submit the user data to the KYC provider.
  3. Await result: poll the provider or receive webhook events for status updates.
  4. Review outcome:
    • Verified: identity checks passed.
    • Pending: additional information is required.
    • Rejected: verification failed due to mismatched data, unacceptable documents, or risk concerns.
  5. Notify the user: update user-facing status and next steps.
  6. Persist status: store the verification outcome in the user profile and audit logs.

Webhook handling documentation

Webhooks are critical for real-time KYC event processing.

Best practices:

  • Validate signatures: verify webhook payloads with the provider’s signature or HMAC token.
  • Use idempotent handlers: process repeated events safely without duplicating actions.
  • Map provider statuses: translate provider-specific status codes into internal states such as pending, verified, rejected, or review_required.
  • Handle retries: accept and safely retry webhooks when the provider resends events after temporary failures.
  • Secure endpoints: require authentication or secret tokens for inbound webhook calls.

Example webhook flow:

  • verification.created
  • verification.updated
  • verification.completed
  • verification.failed

Each event should update the user record, create an audit entry, and, when appropriate, notify support.

Compliance requirements

KYC workflows must comply with data protection and anti-money laundering obligations.

  • Data minimization: store only the information required for verification.
  • Encryption: encrypt sensitive data at rest and in transit.
  • Access controls: restrict access to KYC data to authorized personnel.
  • Retention policy: keep personal data only as long as required by policy and law.
  • Audit logging: log verification requests, status changes, and administrative reviews.
  • Regulatory checks: include sanction-list screening, identity validation, and risk scoring where required.
  • Privacy notices: obtain user consent and explain how identity data is used.

User status management

Model customer verification with clear internal statuses:

  • unverified: no KYC process has started.
  • pending: verification is in progress.
  • verified: identity has been confirmed.
  • rejected: verification failed.
  • suspended: access is limited due to suspicious activity or compliance issues.
  • expired: verification must be refreshed because the existing check is no longer valid.

Status transitions should be driven by provider results, manual review, or policy changes. Keep the workflow auditable and allow administrators to re-trigger verification when needed.