Account holders and accounts have a 1:1 relationship. When an account holder is successfully created, an associated account is also created.

To create a business account holder, a Know Your Business (KYB) process is run to verify the identity of the business. We support two types of workflows for KYB for program managed customers:

• Basic KYB [beta] offers identity verification with an immediate pending decision, with a final accepted or rejected decision provided via webhook within 2 business days
• BYO KYB [deprecated] allows an API user to bypass the Lithic KYB process and create an individual account (available only to users with KYB processes pre-approved by Lithic)

Customers enrolling businesses may also need to enroll those businesses' authorized users using our KYC-exempt workflow. All customers enrolling businesses and issuing physical cards to those businesses' authorized users should enroll those authorized users using the KYC-exempt workflow.

Create Business Account Holders

This endpoint runs the entered individual or business's information (i.e., account holder) through a Customer Identification Program (CIP), and creates an account holder object.

For program managed clients creating a new business account holder you’ll need to pass in KYB_BASIC for the workflow along with information for the business_entity, a description of the nature_of_business, the control_person, and the beneficial_owner_individuals if applicable. Lithic will run the information and if the account holder is successfully verified or requires further verification, an associated account_holder_token and account_token are returned in the response, which can then be used to issue cards once the workflow indicates an ACCEPTED status.

If further verification is required Lithic will return a status of PENDING_REVIEW in the response; you will then be required to upload front and/or back scans of the required documents for review. Lithic will review the documents and the application result will be provided in the account_holder.verification event. To be notified of events see Create Webhook for KYC/KYB Status.

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As a reminder, while using this endpoint is an important part of ensuring your card program is compliant with relevant government and banking regulations, you are responsible for all financial activity on api.lithic.com associated with your API key. This endpoint is intended to be used for KYC/KYB compliance purposes, and not as a comprehensive fraud solution.

KYB Workflow Details

1. Lithic client submits the required information with KYB_BASIC workflow via Create an Individual or Business Account Holder endpoint

2. Lithic responds with ACCEPTED or PENDING_REVIEW status for the account holder.

   1. ACCEPTED - KYB is complete and cards may be issued
   2. PENDING_REVIEW - Either the Business Entity, Beneficial Owner, and/or Control Person needs additional information.

3. For applications PENDING_REVIEW clients must submit the required documents. Use the Get Account Holder endpoint to return the required_documents for the account holder. Once the documents are ready for upload call the Initiate Account Holder Document Upload endpoint. Lithic will return URLs to be used to upload the documents.

4. Lithic will review the documentation and return an APPROVE, REJECT, or PARTIAL_APPROVAL for the failure reasons. An account_holder_document.updated event will be sent with the updated status. To be notified of events see Create Webhook for KYC/KYB Status.

5. If a document was rejected, you will be able to either upload the same type of document again (e.g. the document was blurry) or upload a new document that also satisfies the status_reason (e.g. the driver's license is expired so a passport could be used instead). Use the Initiate Account Holder Document Upload endpoint to upload a new document type otherwise use the Get Account Holder Document Upload endpoint to generate a new upload link for the specified document.

6. Lithic will review the documentation and APPROVE or REJECT the document. An account_holder_document.updated event will be sent with the updated status. To be notified of events see Create Webhook for KYC/KYB Status.

   1. If further information is needed after the documentation is uploaded the Lithic compliance team will reach out via email or Slack with further details.

   

   Expected Response Times:

• Steps 1 + 2 - Customer makes call with required business data and PII, and receives a pending review status for the account holder: Up to 30 seconds
• Steps 3 + 4 - Customer uploads documentation then subsequently receives a webhook containing final status for the account holder: Up to 48 business hours.
• Steps 5 + 6 - Additional document upload and review will take addition time.

Document Review Process

Document Upload Statuses

After an account is created and is in a PENDING status you can call the Get Account Holder Document Uploads endpoint to return the status and URLs for all documents in review or the Get Account Holder Document Upload Status endpoint to return the status of a specific document.

An ACCEPTED document status means the evidence is satisfied and it will no longer be included in the list of required_documents, it does not mean the Business has been approved.

Note that the upload URLs expire after 7 days. If an upload URL expires, you can refresh the URLs by retrieving the document upload from the Get Account Holder Document Uploads endpoint.

Document review failure reasons

The following reasons can be returned in the account_holder.verification event and can be used to decide what action is needed for the additional document upload.

KYB Failure and Required Documents

When a KYB evaluation fails, one or more of the following reasons will be returned in the response.

The following table provides the status_reasons for the failure along with the required_documents that can be used for validation. If an entity has failed for multiple reasons one document upload can satisfy multiple status_reasons as long as the document is listed for each reason i.e. you do not need to upload a document multiple times for different status_reasons.

If able, Lithic will merge required_documents into a subset of documents that satisfies all failures for a given entity. While the document subset is provided for ease of use, you are still able to upload documents that are not provided in the subset given the list below.

Required Documents List

The following provides a description of the allowed document types to satisfy the required_documents.

Create Webhook for KYC/KYB Status

You can create a webhook to be notified of updates to the status of any in-process KYC or KYB evaluation. We send three types of events related to accountholders via our Events platform: account_holder.created, account_holder.updated, and account_holder.verification. You can also see examples of these three events in Sandbox using Send Example Event Types.

Events that will include status,status_reasons, and required_documents

• account_holder.created
• account_holder.verification

Simulating the KYB Flow

1. See Simulating Account Holder Creation page for detail on creating an account.
2. Then use the Simulate an account holder's enrollment review to pass in ACCEPTED or REJECTED
3. To simulate a document review call the Simulate an account holder document upload's review API.