Why Knowing Who You’re Working with Protects Your Business

As a payment processor, we spend a lot of time on Know Your Business (KYB) and Know Your Customer (KYC), and if you’ve spent some time on this process, you know how difficult it can be.  The reason we go through it is to be sure we are onboarding a good merchant.  After all, this important step becomes one of the first lines of defense in the fight against fraud.  This month, we wanted to share some insights on what you need to know about your business partners.

A - Audit Your Affiliates

It only takes one bad merchant to take down an entire payment processor or bank, so knowing who you work with is essential.  Payment processors like Segpay take a comprehensive approach when onboarding merchants.  Many conduct ongoing monitoring, often using third parties to perform daily and weekly comprehensive checks. It’s important to make sure merchants are not involved in any illegal activity, especially since card schemes don’t tolerate the use of illegal activity on their network.  

Those processes we employ are also best practices for merchants to apply to their business partners. That’s right, you have to have a good handle on who your affiliate partners are.  At a minimum, merchants should be gathering things like proper address information, bank account data, and valid identifications of their affiliates.  All affiliate marketing pages should be controlled by the merchant or approved before traffic can be sent through them. We see it happen regularly. At least once or twice a year, we will receive a card brand inquiry on an affiliate landing page with non-compliant content pushing sales to one of our compliant merchants. This is a reminder to all that it is important to ensure affiliate landing pages meet your content requirements. One way merchants can defend themselves to card brands is to have policies in place regarding how you KYC your affiliates, approve their marketing pages, and manage the traffic they are sending you.

B- Be Proactive

Merchants should be proactive, too, and do KYB on studios. Merchants that are licensing content for studios or third-party producers should be reviewing things like their onset policies and how they validate that they are gathering proper model release forms.  The Free Speech Coalition Website ( offers examples of best practices and release forms.  All content should be reviewed and approved before publishing to be sure it meets card brand standards.  

Cam platforms relying on studios should follow the same best practices of gathering data on the studio owners, including their name, address, and bank data. They should also deeply understand how the studio is managed, how the models are being treated, and if they have an accessible copy of the model release forms or the 2257 regulation (adult content age verification) information.  It’s also important to understand the flow of funds in the business.  For example, how are the studios paying out the funds to CAM models?  One way to do this is to ask for proof of payment to models.  This also ensures they are being paid for their work.  There’s been trouble in this area before, and having proof saved the day.  A few years back, several CAM merchants were caught up in a card brand investigation of a CAM studio that had claims of abuse, and that models were being forced to CAM.  The CAM platform could defend its position by clearly showing that it had validated IDs to confirm the age of the models in question and was able to present its content moderation policies, which included both software solutions and human moderation. 

C- Keep Information Complete

The same concerns could also apply to FAN sites. Many content creators rely on agencies to help administrate their business. If you’re a FAN platform relying on agencies to move content creators to your platform, the same due diligence should be completed to understand how these agencies manage their content creators.  The agency’s sample agreement with the content creator would be good to have in your own file.  If they are responsible for posting content and communication, does the agency understand the user-generated content rules of the card brands? Card brands require FAN sites to age-verify all content creators and review all content before posting.  It is still necessary to ensure the agency handling the content understands the card brand rules.  

While the adult industry provides many opportunities to work in a safe and secure environment, earn high salaries, and work flexible schedules, either from a studio or at home, knowing who you’re working with is still important. You and your payment partners can take control of the situation by collecting the right information to guarantee that you meet the numerous legal and regulatory requirements.

Want to learn more?

Contact us today, Reach out to us with your questions at [email protected] and we can share more information about how to successfully pass K-Y-B and K-Y-C

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