Know Your Seller (KYS)

Know Your Seller (KYS) refers to the steps that an online marketplace or auction site takes to verify the identity of the sellers using their platform.

In the United States, online marketplaces are required under the INFORM Consumers Act to verify a seller’s name, contact information, bank account details, and tax identification number (SSN, TIN) if that seller:

  • Brings in at least $5,000 in gross revenue in a 365-day period
  • Completes at least 200 transactions 

Per the law, accepted forms of verification include ID verification, tax document verification, and email/phone verification. Other verification methods can also be leveraged to gain a more comprehensive view of who your sellers are. Although seller verification is only required for high-volume sellers, many online marketplaces have chosen to implement blanket verification of all sellers during onboarding in order to reduce regulatory risk.

The goal of most KYS programs is to reduce the risk of marketplace fraud by preventing fraudsters from opening an account. Verification also provides investigators with an auditable trail to follow when fraud is detected.

Frequently asked questions

What is the difference between KYS and KYB?

KYB, or Know Your Business, refers to processes that a company puts in place to determine whether or not they should work with another business. It is largely centered around preventing money laundering and other financial crimes. 

KYS refers to the process that online marketplaces use to verify a seller’s identity. It is largely centered on preventing marketplace fraud.

Which laws require KYS?

A number of recently passed laws have made KYS a requirement for online marketplaces. In the United States, the most important of these laws is the INFORM Consumers Act, which went into effect on June 27, 2023. In the European Union, KYS is also required under the DAC7, so-called as it is the seventh amendment to the EU’s Directive on Administrative Cooperation. 

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