How Does Amazon’s Know Your Customer Process Really Work?

The process can be confusing, if you don’t understand it. So, we’re demystifying the murky KYC process. Here’s what you need to know if Amazon does come knocking.

By STANLEY CHEN

 

As a seller on Amazon, the lifeblood of your business is ensuring that your selling account remains in good standing with Amazon. If you have to face a Know Your Customer review, your business could be put into a holding pattern.

 Many American sellers on Amazon Europe are worried about the KYC process, yet fewer understand the process all that well. If you’ve read the stories on message boards and blogs about sellers getting their accounts closed down because of KYC, you probably have reason to feel alarmed. Let’s take a little time here to demystify the whole KYC process for global Amazon sellers, so there’s (almost) nothing to be afraid of if KYC review time comes around.

What is Know Your Customer?

KYC = Know Your Customer. KYC is the process used by a business to verify the identity of their clients and manage potential risks in the customer/user relationship. With so many transactions happening online, the world is a very different place from when people used to go to their local bank for an account. Today, the Know Your Customer process is in place in order to prevent fraud, money laundering and identity theft, amongst others (AKA due diligence). Versions of KYC regulations are in effect across much of the world, including the United States, Canada, Australia, the United Kingdom, France, Germany, Spain and Italy.

Why Does Amazon Require KYC Review?

Amazon is required by laws and regulations in the regions in which they’re operating to review their customers (in this case, you) to ensure you’re not engaging in any of the illegal activities described above. We know you’re probably an ambitious entrepreneur and not part of an international crime syndicate, but Amazon doesn’t know that. For this reason, Amazon will periodically require sellers to pass a KYC review. Yes, even if you’ve done nothing wrong or changed your account. They may periodically ask you to verify your KYC documents. The randomness of triggering a KYC review is something Amazon is working on. But be prepared there are a number of situations where KYC may be triggered.

How Does the KYC Process Start?

The KYC process can be triggered by many things, but some of the most common culprits for international Amazon seller accounts are adding new marketplaces, switching bank accounts, and VAT registration. Having to go through a KYC review isn’t something you’d choose to do, and many Amazon sellers are afraid of the KYC process. The reality is if you’re operating a legitimate business with all of the required registrations, licenses, and documentation, you will have nothing to fear.

Here’s What to Do If Amazon is Asking for KYC Verifications

Let’s take a look at some common Amazon global seller situations that can trigger the KYC process and how to fix them.

1) When You Start Selling in a New Marketplace

Many times when you decide to start selling on a new marketplace, Amazon will want to make sure that you’re properly registered for VAT and that you’ve entered the correct bank account information. In order to verify your identity, they’ll ask for a lot of documentation to verify the status of your business. Are you registered as a sole proprietor? Did you change the type of business you’re operating? If so, then you’ll have to supply up-to-date information relating to your business status.

Amazon will ask you to upload these ID items and proof of business:

  • Personal ID: Passport
  • Proof of residential address: Utility bill, credit card statement, etc.
  • Business documents: Varies depending on the type of business that you operate, i.e., Operating Agreement, Articles of Association, Fictitious Business Name Certificate

Get more details on the information required to sell on Amazon Europe in Seller Central.

2) When You Switch Bank Accounts

Amazon advises that you enter your banking details so they can send you a micropayment. When you enter your bank details, Amazon will send you a small amount of money (less than £1.00) which will appear in your bank account within 5-10 working days.

When you receive this payment, you’ll need to click on the link in this line: To provide the required information, please log into your seller account, and click on the top right hand corner Settings > Account Info. You’ll then need to Verify Micropayments in the deposit section.

3) When Registering for VAT

Amazon will also want to ensure that the number you’ve registered to pay VAT was also correctly given to Amazon. In this case, they’ll ask you to confirm the UTR number (or VAT registration number) that was supplied to you from Her Majesty’s Revenue & Customs (HMRC), or any other tax authority.

Know that KYC is a Process

We realize Know Your Customer is a frustrating process, but Amazon will usually provide you with an exact list of the documentation that you need to go through the verification process. Here are a few more tips to head off problems before they happen. Double check everything before sending. Follow the instructions exactly as Amazon requests, and make sure all of the information in your account exactly matches the documents you upload.

It’s going to be stressful waiting for a response, but it’s important to realize Amazon has millions of sellers that they need to verify. So, it may take them time to get back to you. We’re here for you if you’re having issues with the Amazon KYC process or questions, don’t hesitate to get in touch.

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Stanley Chen

Stanley Chen

Stanley Chen, CFA, grew up in Boston. His parents came to the U.S. with $20 and the clothes on their backs. They worked and saved until they opened their own restaurant, where Stanley worked as a dishwasher. After graduating from Brandeis University and working at BlackRock, he went on to become a founding member of Clara Lending. These days, he loves hiking near his Lake Merritt home and helping PingPong merchants take more control over their profits.

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