Deferred identity verification

Deferred identity verification allows platforms to onboard businesses or individuals as Connected Accounts and activate a limited wallet without completing full identity verification at signup.

Identity verification is initiated later when the account reaches specific risk or activity thresholds, or is proactively triggered by the platform.

What is deferred identity verification?

Deferred identity verification is an onboarding workflow that permits Connected Accounts to start transacting with a limited wallet before completing all Know Your Customer (KYC) checks. Specifically, it delays the requirement for liveness checks and full document verification until the user's activity warrants it.

This allows platforms to reduce upfront friction during signup while maintaining compliance through initial screenings and ongoing transaction monitoring.

Why use deferred identity verification?

Deferred identity verification offers several benefits for platforms with high-volume consumer use cases:

• Reduced friction: By removing the immediate need for document uploads and liveness checks, users can sign up and start using the platform faster, leading to higher conversion rates.
• Cost efficiency: Identity verification costs, such as liveness checks, are incurred only for active users who reach specific value thresholds. You don't pay for verifying users who sign up but never transact.
• Immediate utility: Users gain immediate access to the platform's features (within safe limits), allowing them to experience value right away.

What is the consequence of deferred identity verification?

Until the identity verification process is complete, the account operates as a limited wallet. This means the account is active but subject to specific operational restrictions to manage risk.

Limited Wallet restrictions

• Lifetime payout limit: The total amount of funds that can be paid out from the account is capped. Once this limit is reached, no further payouts are allowed until verification is complete.
• Balance limit: In some regions, there may also be a cap on the maximum balance the account can hold.

Risk controls

Even with deferred verification, basic compliance checks are performed at signup. These include:

• Sanctions screening: Checking the user against sanctions lists.
• Prohibited country checks: Ensuring the user is not located in a restricted jurisdiction.
• Age verification: Confirming the user meets the minimum age requirement.

When is identity verification triggered?

Identity verification is triggered in two ways:

1. Activity thresholds: When the user's activity (e.g., cumulative payout amount or balance size) approaches specific regional limits determined by applicable regulations. See Handling deferred ID collection RFIs.
2. Proactive trigger: When the platform chooses to initiate verification early, for example, if a user requests a higher limit or to unlock specific features. See Proactively triggering ID collection.

When either condition is met, the system flags the account for further verification.

RFI process

When the activity threshold is triggered, Airwallex issues a request for identity verification. This requires the user to complete a liveness check and potentially submit identity documents.

1. Trigger: The user hits the activity threshold, or IDV is requested by the platform.
2. Request: Airwallex sends an RFI requiring liveness/identity verification.
3. Verification: The user completes the check (e.g., via a mobile device).
4. Unlock: Upon successful verification, the limited wallet restrictions are lifted, and the user has full access to the account.