As the world’s largest national economy, the United States of America is responsible for generating over 20% of the world’s total income.
The US has maintained its position as the world's largest economy since the interwar period. Despite previous reports forecasting the title of the world’s largest economy would be taken out by China in the 2020s, more recent projections suggest the US will continue to hold the top spot by a significant margin well into the 2030s.
Digital commerce dominates the US market, with an expected total transaction value of $2,255 billion USD in 2024. This figure is forecasted to grow at an annual rate of 10.73% from 2024 to 2028, reaching an estimated $4,620 billion USD by 2028.
The US is at the forefront of digital payment innovation, offering consumers a diverse array of platforms and services. With this in mind, it comes as no surprise that the US is bound by stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.
US KYC compliance regulations
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the US Department of the Treasury that enforces AML regulations, including KYC guidelines. These guidelines are part of a broader effort to prevent money laundering, terrorism financing and other financial crimes. Not to mention, they’re mandatory for financial institutions and a range of other businesses.
The core components of FinCEN's KYC guidelines are outlined in the Customer Identification Procedure (CIP) Rule, which requires financial institutions to verify the identity of their customers, understand the nature of the customer’s business and monitor transactions for suspicious activities.
In addition, businesses and financial institutions are required to conduct ongoing monitoring to assess each customer's risk level and detect suspicious activity under the Customer Due Diligence (CDD) Rule.
Common forms of US identification
In terms of verification documents, there are several types of government-issued identification that are commonly used for KYC purposes in the US. These documents must contain verifiable information, such as a photo, name, date of birth and address.
Here are some common forms of US identification that meet KYC requirements:
Driver's licence: A driver’s license is the most common form of identification in the U.S. It is issued by the Department of Motor Vehicles (DMV) in each state and serves as both proof of identity and a legal permit to drive.
Passport: A US passport is an official travel document issued by the federal government’s Department of State. It serves as proof of citizenship and is used for international travel.
Social Security Number (SSNs): Issued by the Social Security Administration (SSA), a Social Security card contains a unique nine-digit Social Security Number (SSN), which is a critical identifier for US residents and citizens.
Birth certificates: A birth certificate is an official document issued by state or local governments that records the birth of a person. It provides proof of birth and citizenship.
Other forms of ID commonly issued in the US include:
State ID cards,
US passport cards,
Permanent resident card (Green Card),
US military ID card,
US Certificate of Naturalisation, and
US Certificate of Citizenship.
Unlike some countries, the US doesn’t issue a national identity card, which makes it essential to verify identities using a combination of government-issued identification and independent, reliable data sources. With this in mind, organisations must use a high standard of matching criteria and verify identities through multiple data sources to meet KYC regulations.
How to verify US citizens
As part of the CIP process, businesses and institutions must gather key personal details such as:
Full legal name,
Date of birth,
Address, and
Identification number (SSI or Employer Identification Number for entities).
This information is then verified against government-issued identification, like a driver’s licence, passport, etc., or trusted databases. Once the customer’s identity has been verified, records must be maintained for at least five years after the account is closed.
The verification process provides the basis for CDD, which allows businesses to understand the purpose and intended nature of customer relationships. From here, they must conduct a risk assessment of each customer. High-risk customers require Enhanced Due Diligence (EDD) to ensure compliance.
Under KYC requirements, businesses and institutions must also conduct ongoing monitoring to identify suspicious activities that could indicate illegal behaviour.
Verification standards for US citizens
To ensure compliance, many industries in the US require a minimum of 2+2 verification standards, where at least two independent data sources verify two core identity elements, such as name and date of birth.
In higher-risk industries or customers, EDD procedures apply. This typically involves 3+3 verification standards may be employed to ensure more rigorous compliance.
Verify American customers with Data Zoo
Whether you’re conducting business in America or doing business with US citizens, it’s essential to ensure you’ve got the right KYC verification processes in place.
At Data Zoo, our identity verification solution allows us to quickly verify American customers in under two seconds. We verify their information against multiple data points, including their:
Name,
Address,
Date of birth,
ID document (SSN and passport), and
Phone number.
Rather than depending on third-party vendors, we’re able to directly connect with a number of reliable American data sources, including the government, telco providers, credit bureaus and AML watchlists. Not to mention, our robust system ensures regulatory compliance across several key US regulators.
Book a free demo to learn more about Data Zoo can help you verify US citizens.