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Remote Identification of Customers for European Payment Institutions. Part 2

Part 1 by the link (internal link

Finally, there is the third option. It seems to be the easiest and most rational and entails no extra expenses if the customer identification aspect is taken into consideration right away. In spite of the fact that the basic legislation is the same for all European countries, it is just the foundation base on which each particular jurisdiction builds its own legal superstructure. Accordingly, there are countries where the remote identification of customers for the payment institution is allowed. The simplified procedure is as follows: a customer files an account opening application via the company website, accepts the reliable data provision conditions, fills out the forms and attaches scanned copies of his/her passport and residential address confirming document. Your employee checks the data and… the customer is identified! In such a case, the whole procedure takes less than an hour even with allowances made for filling out the forms. At a later time, with customer's account turnover growth, some additional procedures may be needed, for instance, a small interview by Skype or a scanned copy of an additional document, but at any rate there will be neither personal visit to the office, signing of papers nor mailing of the papers. You must admit that this is a solid competitive advantage!

In what countries is the remote identification possible? One of them is the UK – the leader in financial systems that has already issued more than 500 licenses. From the end of 2016, in Lithuania, the country that passed an amendment about the remote identification within the framework of its financial system development plan. In Malta as well, but it shall be taken into account that the remote identification application issues are to be resolved by the regulator and it is far from certain that it will make the decision in your favor. It has to be argued into it.

What's to be done if you need the remote identification but the license is obtained in the country that has no remote identification? There is a way out. The European legislation allows to use KYC procedures of third party companies that have payment licenses in the countries where the remote identification is permitted. Coming around to the example with the Czech Republic, the following plan can be offered: working under the Czech legislation you may engage a company having a license in UK or Lithuania for customer identification. That company will carry out all the procedures and confirm identification of your customer.

Your customer will not be even aware of the fact that he/she has been identified by a third party company since the whole procedure can be automated via API gateway. 



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