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Introduction

The verification process consists in verifying the information a user declares against official documents, like a passport. Once their documents have been validated as being authentic and consistent with the data provided, the user is verified.

However, if the user’s details subsequently change so they are no longer consistent with the documents, then the documents are no longer adequate proof. The downgrade mechanism exists to identify these documents and mark them as outdated.

Without the downgrade mechanism, a user could be verified under one name, then change their name, and then make to a bank account in the altered name. This would present a clear risk of money laundering and terrorism financing.

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Documents and verification level

The focus of the downgrade mechanism is the documents that were validated. Because the verification level is based on validated documents, a downgraded document usually results in a user losing their verified status (i.e., KYCLevel changes from REGULAR to LIGHT) immediately after.

An identity document can also be downgraded before it is validated, when it has only been submitted. In this case there is no change of verification level because the user was not verified before the downgrade.

Note - Downgraded documents must be resubmitted

If a user loses their verified status as a result of the downgraded mechanism, they need to submit the documents again according to the verification process.

They will be unable to request a payout until they have regained verified status.

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Relevant information fields

There are two scenarios in which the downgrade mechanism is applied. A change to the relevant fields triggers a downgrade of the types of KYC Document indicated if they are in the corresponding status.

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1. Change of identity details for natural persons

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Natural user

If the following information is changed:

  • FirstName
  • LastName
  • Birthday
  • Nationality

Then the status of the IDENTITY_PROOF document changes to OUT_OF_DATE if it was previously VALIDATED or VALIDATION_ASKED.

If the following information is changed:

  • LegalRepresentativeFirstName
  • LegalRepresentativeLastName
  • LegalRepresentativeBirthday
  • LegalRepresentativeNationality

Then the status of the IDENTITY_PROOF document changes to OUT_OF_DATE if it was previously VALIDATED or VALIDATION_ASKED.

And the status of the following documents changes to OUT_OF_DATE if it was previously VALIDATED:

  • REGISTRATION_PROOF
  • ARTICLES_OF_ASSOCIATION
  • SHAREHOLDER_DECLARATION

In the case of a legal user, all of the documents are concerned by the downgrade mechanism because they are all associated with the identity of the legal representative.

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Behavior with UserCategory

The UserCategory parameter is mandatory but remains technically optional while platforms integrate it in their onboarding flows. If it is not supplied, or if the user was created before May 2022 when UserCategory was introduced, then the user is categorized as Unknown.

If a user is Unknown, they will not be affected by the downgrade upon becoming an Owner. They will retain their KYCLevel of REGULAR regardless of the order in which the changes are made:

  • Unknown → KYC validated → Payer → Owner
  • Unknown → Payer → KYC validated → Owner
  • Unknown → KYC validated → Owner

After the transition period, all legacy Unknown users will be categorized by Mangopay. If they are categorized as Payers, the exemption from the downgrade will still apply. Only users created as Payers (who never had the category Unknown) can be downgraded.

If the following information is changed:

  • LegalPersonType

Then the status of the REGISTRATION_PROOF document (only) changes to OUT_OF_DATE if it was previously VALIDATED.

This downgrade mechanism applies regardless of the initial and final values of LegalPersonType.

Note - UBO Declaration not affected by downgrade

The information about beneficial owners provided via the UBO Declaration endpoint is not affected by the downgrade. However, the documents against which this information is verified - that is, the articles of association or the Shareholder Declaration signed by the legal representative - can be downgraded.

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Notifications

The following hooks enable you to be notified in case of a user being downgraded.

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KYC_OUTDATED

The KYC_OUTDATED hook notifies you when a document status changes to OUT_OF_DATE.

The notification is sent to your URL with the query parameter, EventType, and date.

For example:

http://example.com?EventType=KYC_OUTDATED&RessourceId=157757171&Date=1670582750

The RessourceId is the unique identifier of the KYC Document.

The GET View a KYC Document endpoint gives you the UserId based on this KycDocumentId:

Response example to obtain the UserId
{
   "Type" : "IDENTITY_PROOF",
   "UserId": "156671912",
   "Flags": [],
   "Id": "157757171",
   "Tag": "Created using MANGOPAY API Collection Postman",
   "CreationDate": 1670424076,
   "ProcessedDate": 1670424186,
   "Status": "OUT_OF_DATE",
   "RefusedReasonType": null,
   "RefusedReasonMessage": null
}

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USER_KYC_LIGHT

The USER_KYC_LIGHT hook notifies you when a user’s KYCLevel changes to LIGHT, meaning that they are no longer verified.

The notification is sent to your URL with the query parameter, EventType, and date.

For example:

https://www.example.com?EventType=USER_KYC_LIGHT&RessourceId=156671912&Date=1670582750

The RessourceId is the unique identifier of the user.

Guide

See the verification requirements for each user type

How to

Learn how to submit a KYC Document

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