KYC or Know Your Customer

The Role of KYC in Mitigating High-Risk Transactions with


KYC or Know Your Customer is an important practice for businesses that allows them to know about their customers. It ensures that you have all the information to help you verify your customers’ identity and protect your business from possible fraudulent activities. This is highly important for those business in the high-risk industries, such as iGaming. It ensures they can comply with legal requirements, laws, AML, and cryptocurrency regulations.

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Finding out about the customer risk rating in high-risk industries is critical since it ensures businesses have all the right information available about their potential customers. So, how can you find out about the customer risk rating? What are the factors that determine this rating? And how can an iGaming payment processing like help you with it? Find out all of this and a lot more in this article.

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What is the Risk Rating Process?

The consumer risk rating is a mechanism that financial institutions or an iGaming payment gateway use to evaluate the cash laundering danger related to a sure purchaser. This mechanism entails various steps, which include amassing records, reading data, verification, and so forth. Firstly, all of the relevant data is collected from the client, inclusive of identification documents, transaction history, nature of their enterprise sports, etc.

After gathering all such information, the financial institution will then run an assessment to find out about the customer’s potential risk for money laundering. The customer will be then assigned a risk rating, which ranges from low to high. This risk rating system is vital for institutions to comply with

AML (Anti-money laundering) and cryptocurrency regulations as well as detect potential risks. Not only that, but it also allows institutions to spot high-risk customers. This way, they can take relevant measures to stop various fraudulent activities along with money laundering, and terrorist financing.

Risk Rating Factors

There are different factors in the rating systems that make up the customer’s potential risk level. While these may vary from institution to institution, some of the essential factors include transaction patterns and geographic locations. The transaction history tells the institution a lot about the customer’s transaction patterns so they can find any unusual or suspicious activity. In addition to that, the geographic location also plays a major role in determining the risk rating.

If the customer is from a high-risk area that is known, then they’ll probably have a higher rating. Furthermore, the business type is also an important factor that impacts the overall risk rating. The institution will bear in mind the character of the consumer’s commercial enterprise sports to decide the extent of cash laundering danger related to the industry.

Why is KYC Important for Business in the iGaming Industry?

The iGaming industry is at high chance because of diverse motives. A lot of the price processors do not provide their offerings to the businesses in this enterprise for iGaming bills due to the reality that it’s far pretty prone to money laundering and different such activities. This is why it makes it so critical for agencies inside the iGaming enterprise to comply with the KYC tactics.

If they do not, then they’ll have to face a wide variety of poor results, including financial penalties, felony actions, loss of recognition, and loads greater. It is quite difficult to find an iGaming payment gateway because of its high-risk nature. Non-compliance with the KYC procedures means that there is a good chance that you will lose the reliable iGaming payment processing partner by your side.

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How to Implement KYC for The iGaming Businesses?

It is highly important that you implement the KYC standards in the right manner. This is because you don’t want to leave any cracks open when implementing this safety standard which can lead to huge problems down the road. So, you should start by devising a proper strategy for your KYC. Have a proper policy that should provide every information, such as the company’s risk appetite, customer identification, verification procedures, and risk assessment process.

Not only that, you should also conduct extensive customer due diligence (CDD). This includes gathering and verifying personal information to identify and verify the identity of their customers. The CDD should also include verifying the source of funds so you can know if the customers aren’t acquiring funds from illegitimate sources. Also having a reliable iGaming payment processing company such as is vital to ensure you are able to comply with the KYC standards.

Final Words

The high-risk payment processing industries such as iGaming and online casinos are subject to fraud and identity theft issues. Nevertheless, the best way to prevent all these things from happening is through complying with the KYC standards and rules to get your iGaming payments securely. This is something highly important if you want to play safe in the world of iGaming.

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