What is Know Your Customer (KYC)?
Synonyms:
| Chinese Terminology | English Term / Usage | Usage Instructions |
|---|---|---|
| 用户身份认证 | Know Your Customer (KYC) | Standard in international finance and compliance; refers to verifying user identity to prevent illegal activities |
| 实名验证 | Real-Name Verification | More colloquial; often used in user registration or platform risk control prompts |
| 账户验证 | Account Verification | Operational term; emphasizes account compliance and security |
| 合规审查 | Compliance Check | B2B or licensing context; emphasizes regulatory compliance |
| 客户尽职调查 | Customer Due Diligence | Common in legal/compliance documents; focuses on financial risk management |
KYC in one sentence:
In iGaming operations, KYC (Know Your Customer) means the platform needs to “confirm who you are” to prevent money laundering, fraud, and illegal transactions.
Just like opening a bank account requires ID and documents, online platforms—whether financial services, e-commerce, or iGaming—use KYC as the global “entry ticket.”
The Core Purpose of KYC
KYC was originally introduced to combat money laundering, especially in the financial sector. You don’t want criminals or illicit funds moving around unchecked, right? Later, the requirement expanded beyond banks to cryptocurrency exchanges, iGaming platforms, cross-border e-commerce, and more: verify first, serve later.
- Verify the authenticity of user identity
- Prevent identity theft, fake accounts, and infiltration by gray/black markets
- Guard against money laundering, fraud, and terrorist financing
- Comply with local regulations
Examples of regulatory requirements include:
- U.S. Bank Secrecy Act (BSA)
- EU Anti-Money Laundering Directive (AMLD)
- Philippines Anti-Money Laundering Act (AMLA)
All these laws push platforms to implement one thing clearly: know your customers.
Why iGaming Platforms Must Implement KYC
iGaming platforms inherently involve high-frequency transactions, cross-border fund flows, virtual payments, and sensitive content. This makes them subject to stricter regulatory and financial risk control pressures:
Regulatory Compliance
Major international iGaming licenses (MGA, Curacao, Isle of Man, PAGCOR, etc.) require KYC in certain situations—large transactions, withdrawals, or suspicious activity. Failure to comply can result in license suspension or hefty fines.
Payment Channel Requirements
Crypto wallets, e-wallets, and third-party payment providers regularly audit partners for KYC compliance. Platforms that cannot prove identity verification may face channel freezes or termination of merchant agreements.
User Security Protection
KYC prevents account theft, arbitrage, point-splitting, bot exploitation, and other fraudulent behavior, reducing losses and improving risk control.
Brand Trust Building
Platforms with robust KYC processes demonstrate professionalism, compliance, and sustainability, earning trust from users, affiliates, and regulators.
How KYC is Done: Typical Steps
The common KYC steps are as follows:
| Step | Description |
|---|---|
| Information Collection | Gather official ID documents such as ID cards, passports, driver’s licenses |
| Address Verification | Submit proof of residence, like utility bills or bank statements |
| Liveness Check | Use AI technology to confirm the user is present, preventing photo or AI-generated fraud |
| Multi-Factor Verification | Cross-check IP, device fingerprints, payment methods, and other parameters to assess risk |
| High-Risk Flagging | Identify users from high-risk countries, frequently changing devices/IPs, or abnormal deposit behavior |
Practical Value of KYC
| Role | Benefits |
|---|---|
| Platform | Reduce legal risk, strengthen brand reputation, maintain payment channels |
| User | Safer accounts, smoother withdrawals, protection against misuse |
| Regulatory Agency | Easier monitoring of fund flows, prevention of illegal activity |
Balancing KYC and User Experience
While KYC is essential for compliance, it can affect user experience. Platforms can optimize by:
- Tiered strategy: New users will undergo simplified verification first, and then complete verification after reaching the withdrawal or accumulated amount threshold.
- Phased implementation: Support verification while playing to avoid user loss due to authentication thresholds
- Automation and customer service collaboration: Technology improves efficiency, while manual intervention enhances service warmth and reduces verification churn.
Summary：：
KYC is more than just real-name verification—it is the foundational mechanism that iGaming platforms must implement in the era of global compliance. It reflects a platform’s respect for regulation, rigor in risk management, and responsibility for user funds.
Online iGaming is a trust-dependent industry with high-frequency transactions and cross-border regulatory oversight. KYC is not only a hard requirement for obtaining licenses and payment channels, but also the first step toward earning user trust and minimizing disputes.
Professional iGaming platforms view KYC not as a burden, but as a strategic moat for long-term growth, compliance, and healthy operations.