KYC and Merchant Onboarding for Swiss Marketplaces: What Obligations Apply?

KYC in the marketplace means that sellers are identified and verified prior to payout. For Swiss platforms, this is important because payment service providers and financial intermediaries must fulfil money laundering and due diligence obligations in accordance with the Money Laundering Act (AMLA) and the FINMA Anti-Money Laundering Ordinance (AMLO-FINMA). Anyone routing payments to sub-merchants as a marketplace operator must ensure that every seller is correctly verified – or outsource this obligation to a licensed Payment Service Provider (PSP).

This guide explains the legal basis, shows which data is required depending on the legal form, and describes how automated onboarding improves compliance and conversion at the same time.

1. What is KYC and KYB?

Know Your Customer (KYC) refers to the statutory obligation to verify the identity of a contracting party before initiating a business relationship or conducting a transaction. In the context of a marketplace, this primarily affects the sellers (sub-merchants) who receive payments via the platform.

Know Your Business (KYB) is the counterpart for legal entities. KYB refers to the verification of the corporate structure, ownership structure, and beneficial owners. KYB is mandatory for marketplaces where GmbHs, associations, or other organisations act as sellers.

In Switzerland, these obligations stem from Art. 3 AMLA (identification of the contracting party) and Art. 4 AMLA (establishment of the beneficial owner). The concrete form is regulated by the FINMA Anti-Money Laundering Ordinance (AMLO-FINMA) as well as the regulations of the self-regulatory organisations (SROs).

2. Legal basis in Switzerland

Anti-Money Laundering Act (AMLA)

The AMLA defines who is considered a financial intermediary and which due diligence obligations must be fulfilled. Pursuant to Art. 2 para. 3 AMLA, persons who provide payment services on a professional basis are deemed to be financial intermediaries. The core duties include identification of the contracting party (Art. 3 AMLA), establishing the identity of the beneficial owner (Art. 4 AMLA), the duty to keep records (Art. 7 AMLA), and the duty to report in the event of suspected money laundering to the Money Laundering Reporting Office Switzerland (MROS) pursuant to Art. 9 AMLA.

AMLO-FINMA and thresholds

The AMLO-FINMA specifies the due diligence obligations of the AMLA. Specific thresholds apply to electronic means of payment that are used exclusively for cashless payment transactions: pursuant to Art. 11 AMLO-FINMA, identification can be waived under certain conditions if no more than CHF 5’000 per calendar year and contracting party is paid and the funds are loaded exclusively via a bank account in Switzerland. If this threshold is exceeded, full identification is mandatory. For marketplaces, this means: as soon as a seller receives more than CHF 5’000 in payouts per year, their KYC must be completed.

Self-Regulatory Organisations (SRO)

Financial intermediaries who are not directly supervised by FINMA must join an SRO. The SROs issue their own regulations, which comply at least with the standard of the AMLO-FINMA. For a PSP executing the KYC on behalf of a marketplace platform, SRO membership is a prerequisite for legal operations.

3. What data does a merchant need during onboarding?

Natural persons (sole proprietorships)

For natural persons, the following information must be documented in accordance with the Agreement on the Professional Rules of Conduct with regard to Due Diligence (CDB 20, Art. 7): surname and first name, date of birth, nationality, and the actual residential address. Verification is generally carried out using an official identification document with a photograph (passport or identity card). Sole proprietorships with an entry in the commercial register are additionally identified using the commercial register extract.

Legal entities (GmbH, AG, association)

For legal entities such as a GmbH or AG, the following are required: company name (registered name), registered office, UID number, current commercial register extract (not older than 12 months), and the identity of the authorised signatories. In addition, the beneficial owner must be established. Associations without an entry in the commercial register are identified on the basis of the articles of association and an extract from the association register or comparable confirmation.

Comparison: requirements by legal form

4. Beneficial owners

A beneficial owner is the natural person who ultimately owns or controls a legal entity, or on whose behalf a transaction is being conducted. Establishing this is mandatory under Art. 4 AMLA. In the case of capital companies such as a GmbH or AG, anyone who directly or indirectly holds more than 25 percent of the shares or voting rights is deemed to be the beneficial owner.

In practice, the KYC process requires sellers on a marketplace to submit a declaration of beneficial ownership (the so-called Form A). In the case of complex ownership structures – such as a GmbH held by a holding company – the chain must be resolved down to the natural person. If no natural person with more than 25 percent shareholding can be identified, the members of the supreme governing body are deemed to be the beneficial owners.

Special rules apply to associations and foundations: here, the founders, the board members, and, if applicable, the beneficiaries must be identified as beneficial owners.

5. Why KYC must happen before the first payout

A common mistake in marketplaces: sellers are allowed onto the platform, orders are processed, but the identity check is postponed. This is not only a compliance risk, but can also have criminal consequences.

Pursuant to Art. 3 para. 1 AMLA, the identity of the contracting party must be verified upon establishing the business relationship. For marketplaces processing via a PSP, this means in concrete terms: before the first payout is made to a sub-merchant, their KYC must be completed. Funds must not flow to an unverified account.

Example: An online marketplace for handicrafts onboarding a new seller. The seller can list products immediately. Only when an order is received and a payout is due must the KYC be completed. If the seller is a GmbH, this includes the commercial register extract and the determination of the beneficial owner. As long as the KYC is pending, payouts are blocked. The customer has already paid – the funds are held in trust by the PSP.

6. What happens to inactive or high-risk merchants

The AMLO-FINMA requires ongoing monitoring of business relationships. For a PSP managing sub-merchants on a marketplace, this results in concrete action duties:

Inactive merchants: Sellers who do not carry out any transactions over a longer period (e.g. 12 months) are usually deactivated. Before reactivation, it must be verified whether the KYC data is still up to date. In the event of material changes (new owner, new registered office), re-identification is required.

High-risk merchants: If a merchant shows unusual patterns – such as skyrocketing sales, many chargebacks, or transactions with high-risk countries – enhanced due diligence obligations apply in accordance with Art. 6 AMLA. This can mean additional document requirements, a personal meeting, or even blocking and reporting to the MROS.

A professional PSP takes care of this monitoring automatically and thus reduces the workload of the marketplace operator. Nevertheless, the platform also shares responsibility: anyone who knowingly admits high-risk sellers without adequate control cannot hide behind the PSP.

7. How automated onboarding increases conversion

Manual KYC onboarding – i.e. collecting documents via email, manual verification by a compliance team, and feedback to the seller – takes an average of several days. For a marketplace relying on fast seller growth, this is a conversion killer.

Automated solutions combine several advantages: the seller uploads their ID document directly, the check is carried out via OCR and database comparison (e.g. against the Swiss Official Gazette of Commerce SOGC or sanction lists), and approval is granted in minutes instead of days. For legal entities, the commercial register extract is automatically retrieved and the ownership structure checked.

Concrete effect: Platforms moving from manual to automated KYC onboarding report a 30 to 50 percent reduction in bounce rates. The reason is simple: the fewer steps and the shorter the waiting time, the higher the likelihood of a seller completing the process.

Checklist: What you should check before starting

• Clarify whether your payment model triggers an AMLA subordination of your own or whether you process via a licensed PSP.

• Define which legal forms (sole proprietorship, GmbH, AG, association) are allowed as sellers on your marketplace.

• Ensure that the KYC process is completed before the first payout – not after.

• Check whether your PSP supports automated identification for Swiss ID documents and commercial register extracts.

• Clarify how to handle beneficial owners: from which ownership threshold is verification required (standard: 25%)?

• Define rules for inactive merchants: after how many months without transactions are they deactivated?

• Set monitoring criteria for high-risk merchants (e.g. chargeback rate, spikes in sales, country risk).

• Ensure that all KYC documents are stored for at least 10 years in accordance with Art. 7 AMLA.

• Check whether your PSP supports Swiss payment methods (TWINT, PostFinance, QR-bill) for sub-merchants.

• Document the entire onboarding process in writing as part of your internal compliance documentation.

How Payrexx supports you in merchant onboarding

As a Swiss PSP, Payrexx offers a marketplace payment solution that completely takes over the KYC and onboarding of sub-merchants. Sellers go through an automated verification process directly in the platform, including ID checks, commercial register comparison, and determination of beneficial owners.

The payout to verified merchants is done via Split Payment: the platform commission goes to the marketplace operator, the remaining amount directly to the seller. In this way, the platform never touches customer funds. Payrexx supports all common Swiss payment methods – TWINT, PostFinance, credit cards, and QR-bill – and can be integrated into existing systems via API.

Payrexx is your distribution partner for Swiss marketplaces.