Required Fields for Boarding Applications

Merchant underwriting is a similar process to applying for a mortgage or car loan. Payabli must gather certain information from merchants to meet federal know-your-business (KYB) and know-your-customer (KYC) requirements, and to confirm a merchant’s trustworthiness.

All applicants must complete a Payabli Merchant Application that includes the legal information for the business, and information about each beneficial owner. Other documents may be required if the screening verification doesn’t return any verifiable digital validation.

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Business information

• Legal entity name of business registered with the IRS and the state in which the business is incorporated. If Payabli can’t verify the legal name during underwriting, we may request the applicant’s SS-4 (A document from the IRS that confirms the EIN and managing member of the business being underwritten) or articles of incorporation.
• Federal Tax ID: EIN/TIN. For a sole proprietorship, the sole proprietor may use their Social Security Number (SSN).
• Applicable DBA (“doing business as”) name or trade names registered to the legal entity that’s applying.
• Business legal address. This is the principal place of business or a local office. This can’t be a P.O. Box.
• Business Type and description of product sold and or service provided. This description must be detailed enough for Payabli to determine the merchant’s Merchant Category Code (MCC).
• Business website URL.

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Beneficial ownership

For each beneficial owner, Payabli needs the following information:

• Legal name
• Date of birth
• Contact information: current U.S. residence address, direct phone number, and direct email address
• Identification number: either a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
• Driver’s license number and state of issuance

Payabli uses this information to verify the individual’s identity and their with the business.

A beneficial owner is someone who has significant control over or ownership of a company. Control or ownership is identified through either the control prong or the ownership prong. The control prong is based on the power to influence company decisions and operations, and the ownership prong is based on holding a significant part of the company’s equity.

Beneficial ownership information is required by authorities in most jurisdictions. This information helps governments fight corruption, money laundering, and tax evasion, and helps maintain integrity and accountability in financial systems worldwide.

The next two sections explain these prongs in more detail.

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Control prong

The control prong focuses on determining beneficial ownership based on the level of control an individual or entity has over a company, regardless of their ownership stake. Someone might be a beneficial owner if they have substantial influence or control over a company’s operations, decision-making processes, or financial affairs. Control is exerted through various means, such as voting rights, board representation, business management or contractual agreements.

Examples of beneficial owners via the control prong include:

• Executive directors of a nonprofit
• C-suite members of a publicly traded company
• An entity you’ve ceded management of your business operations to, such as a dental service organization or property management company

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Ownership prong

The ownership prong focuses on determining beneficial ownership based on direct or indirect ownership interests in a company. This prong considers factors such as the percentage of shares owned, voting rights attached to those shares, and any arrangements that provide economic benefits derived from the company’s assets or profits.

Individuals or entities with substantial ownership of 25 percent or more of the equity interests in a company are typically considered beneficial owners.