To help you answer questions about why we require this information for underwriting.
In payment processing, underwriting (also called merchant underwriting) is a risk assessment every merchant undergoes before they can accept electronic payments. If you want to accept payments online, you’ll need a merchant account. When you complete your merchant account application, that’s when you’ll go through the underwriting process.
Paystand is required to gather details regarding the business entity and a representative of that entity. As much as it might make things easier, all underwriting information must be gathered or else Paystand is not allowed to process payments on your behalf. This is not Paystand’s decision but the requirement of our banking and processing partners.
Since the enactment of the 2001 Patriot Act, all banking institutions and processors must verify there are legitimate individuals and businesses behind the movement of funds (Department of Treasury, Section 326). The FBI goes on to further elaborate that the information is needed to verify the legitimacy of both the organization and the individual, including:
- Tax ID of the specified organization (EIN)
- Social Security Number and Date of Birth of a full-time representative of that Organization
- Note: the SSN/DOB provided by the representative can be any full-time employee who is responsible for the organization’s online payments (this can range from bookkeepers, Accounts Receivable managers, treasurers, controllers, CFOs, etc). While we have worked with CFOs and CEOs during underwriting, it does not have to be those individuals per se.
Security of Sensitive Information: Paystand takes all data (not just card and banking) security seriously. For instance, we are Level 1 compliant with PCI, SOC2 compliant, and we are audited by third-party security assessors on a quarterly basis, to ensure Paystand exceeds online security standards. Additionally, all underwriting documents submitted are destroyed once the organization has cleared underwriting.
It is the same requirement from any merchant, whether it be a processor or payment facilitator. Here are examples of other third-party merchants stating the same requirement:
- Why Do Credit Card Processors Ask for Your Social Security Number? (Chosen Payments)
- US Merchant Account Requirements: SSN’s & TIN’s (Durango Merchant Services, LLC)
- Why a Social Security Number is Required for a Merchant Account (Maverick BankCard, Inc)
Hi Friend,
Completely understand your concern here, this is a common concern we come across. Unfortunately, these are strict requirements as we're essentially setting up a bank account in your name.
Paystand is required to gather details regarding the business entity and a representative of that entity. As much as it might make things easier, all underwriting information must be gathered or else Paystand is not allowed to process payments on your behalf. This is not Paystand’s decision but the requirement of our banking and processing partners.
Since the enactment of the 2001 Patriot Act, all banking institutions and processors must verify there are legitimate individuals and businesses behind the movement of funds (Department of Treasury, Section 326). The FBI goes on to further elaborate that the information is needed to verify the legitimacy of both the organization and the individual, including:
- Tax ID of the specified organization (EIN)
- Social Security Number and Date of Birth of a full-time representative of that Organization
- Note: the SSN/DOB provided by the representative can be any full-time employee who is responsible for the organization’s online payments (this can range from bookkeepers, Accounts Receivable managers, treasurers, controllers, CFOs, etc). While we have worked with CFOs and CEOs during underwriting, it does not have to be those individuals per se.
Security of sensitive information: Paystand takes all data (not just card and banking) security seriously. For instance, we are Level 1 compliant with PCI, SOC2 compliant, and we are audited by third-party security assessors on a quarterly basis, to ensure Paystand exceeds online security standards. Additionally, all underwriting documents submitted are destroyed once the organization has cleared underwriting.
It is the same requirement from any merchant, whether a processor or payment facilitator. Here are examples of other third-party merchants stating the same requirement:
- Why Do Credit Card Processors Ask for Your Social Security Number? (Chosen Payments)
- US Merchant Account Requirements: SSN’s & TIN’s (Durango Merchant Services, LLC)
- Why a Social Security Number is Required for a Merchant Account (Maverick BankCard, Inc)
Please let me know if you need any further information. I'm always happy to connect you with our head of underwriting who can explain this more clearly.
Best,