KYC (Know Your Customer) Process

The KYC (Know Your Customer) process is the legally mandated identity and background check that banks and payment service providers must perform before commencing a business relationship. Event organizers must complete this process before they are permitted to collect ticket payments through a regulated provider. The process is designed to combat money laundering and terrorist financing and is mandatory, not optional.

Legal basis (DE): Money Laundering Act (GwG)

EU basis: 5th and 6th Anti-Money Laundering Directives

Duration: A few days to several weeks

What is the KYC process?

Know Your Customer (KYC) describes the legal obligation of banks and payment service providers to identify their business customers before establishing a business relationship, to understand their economic background, and to assess the risk of the business connection. The purpose: to combat money laundering, terrorist financing, tax evasion, and other forms of financial crime.

For event organizers, KYC becomes relevant whenever they wish to collect ticket payments via Converia Pay (using a BaFin-certified payment service provider) or any other regulated payment service provider (e.g., Stripe, Adyen, Mollie, PayPal). Without a completed KYC process, the payout of received funds is blocked – no ticket sales, no liquidity.

The process is closely integrated with payment management and should therefore be considered early in the event planning phase.

Legal bases

• Money Laundering Act (GwG): National implementation of EU requirements in Germany
• 5th and 6th EU Anti-Money Laundering Directives: Uniform standards across the EU
• Payment Services Supervision Act (ZAG): Regulates the obligations of payment service providers
• BaFin requirements: Specific interpretations for German providers
• International standards: Recommendations of the Financial Action Task Force (FATF)

What data is collected during the KYC process?

• Identity of the legal entity: Commercial register extract, articles of association, tax IDs
• Business address and main business activity
• Ultimate Beneficial Owners (UBO): Natural persons who hold more than 25% or exercise control
• Authorized representatives: Management, board members
• Identification of natural persons: ID card or passport, proof of residence if applicable
• Expected transaction volume and patterns
• Business model: What are the payments being collected for?
• Money laundering risk assessment: Industry, countries, politically exposed persons
• Bank details for payouts
• Public institutions such as universities are subject to significantly simplified requirements. They must still complete certain steps of the process.

KYC process workflow

1. Registration with the payment service provider with basic organizational data
2. Submission of documents via secure upload portals
3. Identification of natural persons: Video-Ident procedure, PostIdent, or similar
4. Verification of beneficial owners with screening against sanctions lists
5. Risk assessment by the provider
6. Potential follow-up questions in case of ambiguities – often the biggest time-sink
7. Activation of payment acceptance
8. Ongoing monitoring: Re-verification in the event of significant changes (change of management, unusual transactions)

Typical pitfalls

• Beneficial owners in complex structures: Foundations, associations with membership hierarchies – identification can be time-consuming
• International connections: Persons residing outside the EU often require additional identification steps
• Ambiguities in the business model: Anyone "organizing events" must be specific (Association? PCO? Agency?)
• Sanctions list hits: Even false positives (same names) lead to delays
• Late application: KYC takes weeks – starting two weeks before sales launch is too late
• Missing documents: Required documents are not always immediately available
• Unclear responsibilities: Who is handling KYC – the organizer, PCO, or accounting?

Best practices for organizers

• Plan for at least 6–8 weeks of lead time before the planned sales launch
• Clearly assign responsibility – one person should be in charge of KYC
• Prepare documents: Current commercial register extract, management passports, UBO list
• In case of organizational changes proactively inform the provider
• Use framework agreements to manage multiple events under one KYC
• No shortcuts! – Providers that skip the KYC process operate without BaFin supervision and are untrustworthy! Organizers should think twice before parking five- to seven-figure sums with unreliable providers.

KYC in Converia

Converia works exclusively with BaFin-regulated payment service providers whose KYC processes are clearly structured for event organizers. We support you during onboarding: which documents are required, which individuals need to identify themselves, how long activation takes – all transparent and legally compliant.

Sales launch without KYC delays

With Converia, you can plan your ticket sales including the KYC lead time – ensuring your sales launch happens on time, rather than being held back by the KYC process.

• Payment Management – Ticketing & Registration
• Ticketing System – Ticketing & Registration
• GDPR for Events – Compliance & Legal

BaFin-regulated service providers and clear onboarding processes ensure that the KYC process doesn't become a bottleneck for sales.