Underwriting Documentation
In payment processing, merchant underwriting is a risk assessment every merchant undergoes before they can accept electronic payments. Underwriters use documents to verify identity, and credit history, and assess an applicant’s financial status while ensuring the information provided is accurate.
When Worldpay for Platforms processes transactions on behalf of a merchant, we are taking on a certain amount of risk. Processing a payment is like providing a business with credit, similar to a line of credit. Worldpay for Platforms performs due diligence to assess a business’ merchant risk level before going ahead and providing it with a merchant account. This process is called underwriting.
Worldpay for Platforms uses a combination of automated tools and manual reviews to assess these factors and determine the risk level associated with a merchant. Depending on the outcome of the underwriting process, a merchant might be approved, approved with conditions, or denied payment processing services.
Business Information
Business registration details and documentation, such as IRS SS-4, and Secretary of State (SOS) registration, including but not limited to Articles of Incorporation.
Location of the business, physical and online presence (such as utility bill, lease agreement, and website)
Business Model and Operations
Description of products or services offered by the business, including delivery timeframes or subscription models, and refund and chargeback policies.
Supplier or drop-shipper information (such as contracts, proof of delivery, and proof of possession)
Compliance and Risk Assessment
Anti-money laundering (AML), Know-Your-Customer (KYC), and Know-Your-Business (KYB) checks, such as SSN Card, IRS SS-4, and Secretary of State (SOS) registration, including but not limited to Articles of Incorporation.
Evaluation of any previous history of fraud, excessive chargebacks, or legal issues
Validate owner and business against the list of Office of Foreign Asset Control’s (OFAC) Specially Designated Nationals and Blocked Persons list (SDN).
Financial Information
Business financial statements such as income statements, balance sheets, cash flow statements, bank statements, and processing statements if the business has previously accepted payments.
Personal and business credit reports to evaluate creditworthiness.
Worldpay for Platforms also conducts Fraud Identity Validation to ensure that we are doing business with a valid merchant/owner. Information and documentation might be required to onboard an account in which there are indications of fraudulent identity, such as a copy of government-issued identification and a utility bill, or proof of address ownership.
At Worldpay for Platforms, we take our responsibility seriously to keep our partners and their merchants safe and secure. This responsibility extends to not just our Partners themselves, but also the consumers who use the businesses’ services.
Underwriting Documentation FAQs
Understanding the documentation required for underwriting can help streamline the process and ensure compliance. Here are some frequently asked questions regarding underwriting documentation:
Why Do You Need a Copy of a Driver’s License?
Identity theft is an increasing problem across the industry, and millions of consumers and businesses are victimized each year. In fact, Identity theft cases where multiple individuals using the same or similar identity information increased from 4,063 in 2021 to 10,345 in 2022. This is more than double from the year before. As a result, organizations must help prevent accounts from being opened without consumers' and companies' knowledge. Providing this information allows us to verify that the information on the account is legitimate (driver’s license) and that the person applying is the true person applying for the account.
Why Are You Asking for a Utility Bill?
A phone bill can be used to verify your identity. By comparing the information on the bill with the information you provided during account registration, the payment processor can confirm that the information provided at signup is valid and accurate. In addition, this helps prevent fraud and unauthorized use of accounts. Fraudsters and scammers often create fake accounts using stolen or fabricated information. Requesting a phone bill can be a way to prevent this kind of activity. Legitimate users are more likely to have a genuine and recent phone bill associated with their account.
Why Do You Need a Bank Letter, Voided Check, or Bank Statement?
Verifying your bank account is crucial for payment processors to ensure that the account is valid and belongs to you. A bank letter, bank statement, or voided check can help confirm your account details, such as your account number and routing number. Because you are linking a bank account to your Payrix processing account, providing a bank letter, bank statement, or voided check can help establish the connection and verify ownership.
Why Do You Need a Website for My Application?
A website can provide transparency about your business operations, products, pricing, and terms of service. Payment processors might review your website to ensure that your business aligns with their policies and guidelines. In addition, your website content and business model can provide insights into the type of transactions you’ll be conducting, which helps the payment processor evaluate the potential risks and fraud.