This article covers why beneficial ownership information is required when applying for Keap™ Pay, who qualifies as a beneficial owner, and how Keap Pay verifies beneficial owner identities. This information is required by federal law as part of the Know Your Customer (KYC) and Know Your Business (KYB) compliance process. For help completing the Keap Pay application, see how to apply for Keap Pay.

Note — Additional verification: If a Keap Pay application requires additional documents or information for verification, the Payments team will send an email from payments@keap.com with further instructions.

Why Personal Information Is Required to Apply for Keap Pay

When a merchant opens any financial account — including a payment processing account with Keap Pay — personal information is required by law. Financial institutions and their partners are legally required to identify and verify the identity of their customers to prevent financial crimes such as money laundering and terrorism financing.

The Financial Crimes Enforcement Network (FinCEN) is the regulatory agency responsible for enforcing the Bank Secrecy Act (BSA), which outlines the requirements for customer identification and verification. Under the BSA, financial institutions and their partners — including Keap Pay — are required to establish and maintain an effective Customer Identification Program (CIP). This program includes verifying the identity of the beneficial owners and controlling members of every merchant that opens an account.

Who Qualifies as a Beneficial Owner

All beneficial owners of a merchant must be verified. The U.S. government defines a beneficial owner as any individual who directly or indirectly owns or controls 25% or more of the company, or who directly or indirectly exercises substantial control over the business. A senior officer such as a CEO is considered to have substantial control regardless of ownership percentage.

Determining who qualifies as a beneficial owner can be approached as a series of questions about ownership and control.

The diagram above shows the decision tree for determining beneficial ownership based on the two qualifying criteria — percentage ownership and substantial control.

Example 1 — Sole proprietorship: For a sole proprietorship owned and operated by a single individual, that individual meets both criteria and is the sole beneficial owner.

The diagram above shows the beneficial ownership determination for a sole proprietorship. The owner meets both the ownership threshold and the substantial control criteria.

Example 2 — Non-profit organization: For a non-profit that has no owners but has a founder who actively runs the organization, the founder qualifies as a beneficial owner under the substantial control criterion even though no individual owns 25% or more of the entity.

The diagram above shows the beneficial ownership determination for a non-profit organization. The founder qualifies under the substantial control criterion even though no ownership percentage applies.

How Keap Pay Verifies Beneficial Owner Identity

To comply with these requirements, Keap Pay collects and verifies personal information for each beneficial owner, including name, address, date of birth, and Social Security Number. Additional information may be required depending on the nature of the legal entity or the result of the initial verification.

Providing accurate and complete information is required. Failure to provide accurate information can result in Keap Pay being unable to open an account. Additionally, the USA PATRIOT Act of 2001 imposes penalties on individuals who knowingly provide false or fraudulent information when opening a financial account.

Summary

When opening a merchant account with Keap Pay, providing personal information as part of the customer identification and verification process is a legal requirement under the Bank Secrecy Act. Failure to comply can result in penalties for both the payment provider and the individual. Providing accurate and complete information helps ensure a smooth account opening process and compliance with applicable laws and regulations.

For more information on FinCEN and the Bank Secrecy Act, see the FinCEN website and the FDIC beneficial ownership guidance.

Frequently Asked Questions

What does this article cover?

This article covers why beneficial ownership information is required for Keap Pay, who qualifies as a beneficial owner under U.S. law, and how Keap Pay verifies beneficial owner identities. For help with the Keap Pay application, see how to apply for Keap Pay.

Does a non-profit organization have beneficial owners?

Yes, in most cases. Even if a non-profit has no individuals who own 25% or more of the organization, any individual who exercises substantial control — such as a founder, executive director, or CEO — qualifies as a beneficial owner under the U.S. government definition and must be verified.

What happens if incorrect information is provided?

Providing inaccurate or incomplete information can prevent Keap Pay from opening an account. Knowingly providing false or fraudulent information when opening a financial account carries penalties under the USA PATRIOT Act of 2001.