Lithic Due Diligence

At Lithic, we're committed to helping you launch your program successfully and securely. Our onboarding process ensures that regulatory requirements are met.

We understand that navigating compliance can be complex, which is why we've designed our process to be as straightforward as possible.

The onboarding process typically takes a week, depending on the complexity of your program and how quickly documentation is provided. Our team will guide you through each step, ensuring you have everything needed for a smooth launch. We're here to support you throughout this journey.

Program Management

The requirements vary based on who is taking on program management responsibilities between you and Lithic.

Process Overview

Our onboarding process consists of two key components:

• Know Your Business (KYB) Due Diligence, which includes Ultimate Beneficial Ownership (UBO) and Control Person Screening
• Risk Assessment (where Lithic is Program Manager)

Know Your Business (KYB) Due Diligence

This process helps us verify your business identity and understand your operations. KYB is essential for preventing money laundering, terrorist financing, and fraud while ensuring regulatory compliance.

Required Documentation for KYB

All clients are required to provide the following business information:

• Legal name
• DBA (doing business as)
• Tax ID
• Physical address (PO Box, mailbox, virtual, or registered agent addresses are not acceptable)
• Articles/Certificate of Incorporation
• A description of your card program's use case
• An SS-4/IRS Letter may be requested if we cannot verify your business information through our vendors.
• If Lithic is the program manager: Please also provide an SS-4/IRS Letter that references your business Tax ID, and financial statements (Last 3 months of bank statements and last 12 months of financial statements.)

Ultimate Beneficial Ownership (UBO) and Control Person Screening

We’re required by law to identify and verify:

• All Ultimate Beneficial Owners (UBOs). Every individual who owns 25% or more of your company, including indirect owners (i.e., a 50% owner of a 50% owner of the business).
• Control Person. Someone who can exercise significant control over the business (e.g., CEO, CFO, general partner, president, or treasurer).

Each UBO and Control Person must provide:

• Full name and date of birth
• Social security number
• Phone number
• Company email address
• Residential address – We are not able to accept PO Box, mailbox, virtual, or registered agent addresses
• Ownership percentage (for UBOs)
• Driver's License (for US individuals, if needed for verification. You may provide this up front to preempt Lithic needing to follow up and ask, though we may not ultimately need it; Passport (for non-US individuals)

Risk Assessment

This section is relevant only if Lithic is acting as the program manager

Our Risk team conducts a thorough evaluation to understand your business's financial health and risk management capabilities. This helps us determine appropriate risk controls and reserve requirements.
The risk assessment includes two components:

1. Financial Health Assessment (Underwriting)

   We'll review your financial documentation to assess your company's stability. We need 12 months of the below documents:
   • Balance Sheet
   • Profit & Loss Statement
   • Statement of Cash Flows

2. Risk Review (Risk Rating & Reserve)

   This will include a live conversation with our Risk team to discuss:
   • Volume projections (broken out by card vs ACH payment rail, if applicable)
   • Your risk management systems and processes
   • Appropriate reserve levels for your program
   • Any organizational information relevant to support risk management
     
     

Contact Information

Questions about the onboarding process? Our team is here to help every step of the way. Reach out to your Lithic representative or contact our support team for assistance.