User KYC/KYB verification

Verification downgrade

Introduction

The KYC/KYB verification process consists in verifying the information a user declares against official documents, like a passport. In the case of Mangopay’s hosted verification session there is also a liveness check.

Once their documents have been validated as being authentic and consistent with the individual’s data, the user is verified. In the API, the Natural User or Legal User is verified when their KYCLevel changes from LIGHT to REGULAR.

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.

In this case, Mangopay applies a downgrade mechanism to mark the relevant KYC Document or IDV Session objects as outdated.

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

What is downgraded

Mangopay offers two solutions that allow user’s to become KYC/KYB verified:

  • A hosted solution (using an IDV Session API object), where the user enters data on a Mangopay-hosted webpage (and uploads documents if a Legal User), and completes a liveness check using their ID
  • An API-based solution (using one or more KYC Document API objects), where the user submits data and static document files on your platform

The downgrade mechanism is indicated by the Status of these API objects changing to OUT_OF_DATE (same value on both IDV Sessions and KYC Documents).

Typically, the User’s KYCLevel changes simultaneously from REGULAR to LIGHT, indicating that they have lost their KYC/KYB verified status.

In the case of the KYC Document, an identity document can be downgraded after submission but before validation. In this case there is no change of verification level because the user was not verified before the downgrade.

Note - Downgraded sessions and documents must be resubmitted

If a user loses their KYC/KYB verified status as a result of the downgraded mechanism, they need to complete the IDV Session again or submit the relevant KYC Document again.

They will be unable to exceed the KYC/KYB limits (e.g. request a payout) until they have regained verified status.

Relevant information fields

There are two scenarios in which the downgrade mechanism is applied.

1. Change of identity details for natural persons

Natural user

If the following information is changed:

  • FirstName
  • LastName
  • Birthday
  • Nationality

Then:

  • In the hosted solution, the Status of the IDV Session changes to OUT_OF_DATE if it was previously VALIDATED.
  • In the API-based solution, the Status of the KYC Document with Type IDENTITY_PROOF changes to OUT_OF_DATE if it was previously VALIDATED or VALIDATION_ASKED.

If the following information is changed regarding the declared individual representing the legal entity:

  • LegalRepresentative.FirstName
  • LegalRepresentative.LastName
  • LegalRepresentative.Birthday
  • LegalRepresentative.Nationality

Then:

  • In the hosted solution:
    • The Status of the IDV Session changes to OUT_OF_DATE if it was previously VALIDATED.
  • In the API-based solution, the KYC Document Status values change depending on the Type:
    • The IDENTITY_PROOF status changes to OUT_OF_DATE if it was previously VALIDATED or VALIDATION_ASKED.
    • The REGISTRATION_PROOF, ARTICLES_OF_ASSOCIATION, and SHAREHOLDER_DECLARATION (as applicable) status changes to OUT_OF_DATE if it was previously VALIDATED.

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 declared legal representative.

If the following information is changed:

  • LegalPersonType

Then:

  • In the hosted solution:
    • The Status of the IDV Session changes to OUT_OF_DATE if it was previously VALIDATED.
  • In the API-based solution:
    • 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.

Notifications

Your platform should set up webhook notifications for the following event types to be notified when a downgrade occurs.

  • For Natural and Legal Users, the USER_KYC_LIGHT event indicates that their KYCLevel changed from REGULAR to LIGHT, meaning that they have lost their KYC/KYB verified status.
  • For the hosted solution, the IDENTITY_VERIFICATION_OUTDATED event indicates that the session’s Status changed to OUT_OF_DATE.
  • For the API-based solution, the KYC_OUTDATED event indicates that the document’s Status changed to OUT_OF_DATE.
Guide

See the verification requirements for each user type

How to

Learn more about Mangopay’s hosted KYC/KYB verification solution

How to

Learn how to submit a KYC Document