Know Your Seller (KYS)

While both KYS and KYB aim to verify entities involved in business transactions, they focus on different relationships. KYB (Know Your Business) is used primarily in banking and fintech to verify business clients, especially in a B2B context. KYS is specific to marketplaces and e-commerce platforms that must ensure their sellers are legitimate. KYS often goes deeper into product sourcing, fulfillment logistics, and customer service history—factors less relevant in a standard KYB check.

The INFORM Consumers Act in the U.S. (effective June 2023) mandates that online marketplaces collect, verify, and disclose information about high-volume third-party sellers. Similar seller transparency laws are emerging globally, such as the EU Digital Services Act. While not always labeled "KYS" in the legal text, these laws effectively require marketplaces to implement seller due diligence programs.

One of the key challenges is balancing fraud prevention with seller onboarding speed. Requiring too much information upfront can deter genuine sellers, while being too lenient opens the door to bad actors. Verifying global sellers is particularly tricky due to jurisdictional differences in documentation, language, and compliance standards. Additionally, fraud rings may use identity obfuscation or synthetic data to repeatedly onboard new seller accounts, bypassing weak KYS controls.