Understanding the Open Loop KYC (Know Your Customer) Process

At Tillo, we want to make your payment program as seamless and secure as possible. To protect our Partners and their payees from fraud and financial crime, our issuing bank partners use an identity verification process known as Know Your Customer (KYC).

Think of a KYC check like showing your ID at a bank branch, but entirely digital. It verifies that the person claiming the digital payment is exactly who they say they are, keeping fraudulent actors out of the ecosystem.

This guide breaks down when a KYC check happens, how the system decides to trigger one, and what the experience looks like for your customers.

What Triggers a KYC Request?

A KYC check isn't random. It is automatically triggered by the currency of the payment, or by automated safety checks during the redemption process.

1. Currency-Based Triggers

Certain currencies require a KYC check for any value, while others do not require a check unless a specific exception is met.

⚠️ USD Exception: While USD does not enforce a strict threshold-based KYC check, it remains subject to automated watchlist reviews and fictitious name reviews. Either of these automated checks can trigger an immediate request for KYC verification.

2. Behavioral & System Triggers

Beyond currency rules, a payee will be prompted to undergo KYC verification if they trigger any of the following automated safety flags:

• Fictitious Name Monitoring: If a payee attempts to enter fake information (e.g., "Mickey Mouse"), minimal information ("Mister Cook"), or gibberish ("fdsa jkl"), our third-party name verification tool (Melissa Global Name API) will flag the entry.

• Address Validation Failures: All entered addresses are checked via address validation tools (like Smarty). International payees are given three attempts to enter a valid address. If the address cannot be validated after the third attempt, a KYC check is triggered.

• Cumulative Totals: A threshold check is prompted if a payee attempts to redeem a payment that causes their cumulative total payment amount (tracked by their email address) to reach regulatory limits.

The End-User KYC Journey

When a KYC check is triggered, the digital payment platform seamlessly inserts an Identity Verification request into the payee's user journey. Payees cannot access their funds until this process is completed.

Step 1: Initial Identity Verification

The payee must confirm their full name, primary residential address, and input their Date of Birth (DOB). Depending on their country of residence, they may also be asked for a government-issued personal identification number (such as a National ID, Tax File Number, or Passport Number).

Step 2: Document Upload (If Real-Time Validation Fails)

If the system cannot instantly validate the payee's information against official watchlists, they will be asked to provide supporting documentation.

• Desktop Users: Will see a QR code on their screen, which they must scan with their mobile device to complete the secure upload.

• Mobile Users: Will be automatically redirected to the document capture portal.

The payee will use their mobile camera to take a clear photo of a government-issued ID (such as a Driver’s License, Passport, or Government Photo ID) and submit it.

Step 3: Verification Review & Results

Once submitted, the verification process typically takes 10–15 minutes. Payees can choose to wait on the platform or log out; they will receive an email with their final status.

• Success: The payee receives an "Identity Verification Complete" email. They can click Confirm Your Payment or use their digital token on the payment site to immediately unlock and access their funds.

• Incomplete / Further Review: If the system requires manual review (e.g., due to an unreadable document or potential watchlist match), the compliance team will work proactively to clear the account within 5 business days. The payee will be notified via email regarding any next steps or additional documents required (such as a recent utility bill to verify their address).

Sharing This Information with Your Customers

As a Tillo Partner, you are welcome to share these guidelines directly with your customers to help manage expectations and streamline their payment experience.

Key Takeaways for customers who purchase an open loop card:

• Accuracy matters: Entering full, accurate legal names and current residential addresses reduces the likelihood of manual review delays.

• One-time process: Once a payee successfully completes the KYC check, they generally do not need to do it again unless their profile information changes or global regulations shift.

• Funds are safe: If an identity is undergoing a 5-day review, previously loaded card funds remain spendable, though new payments will be paused until the review is fully cleared.