Why Merchant Applications May Request an SSN or ITIN
Learn why financial institutions may request personal identification during the merchant application process, how it differs from your business EIN, and what it means for businesses, nonprofits, and other organizations.
Why is personal identification sometimes requested?
Merchant accounts are financial service relationships. To complete underwriting, the reviewing financial institution or payment provider may request personal identification to verify the identity of an individual authorized to act on behalf of the organization. Requirements vary depending on the institution and its underwriting policies, so not every applicant will be asked for the same information.
EIN vs SSN / ITIN
An Employer Identification Number (EIN) and a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) identify different parties. Both may be requested during underwriting because they serve different purposes.
Employer Identification Number (EIN)
- Identifies the organization
- Federal Tax ID
- Used for business or nonprofit entities
SSN / ITIN
- Identifies an individual
- Used to verify an authorized representative
- May be requested during underwriting
Who may be asked to provide identification?
The appropriate individual depends on the organization and underwriting requirements. Examples of individuals who may be asked to provide identification include:
Why can this apply to nonprofits?
Nonprofits generally do not have owners. However, financial institutions may request identification for an individual authorized to control or manage the organization, such as:
The nonprofit's EIN identifies the organization, while personal identification may be used to verify the authorized individual. Tax-exempt status does not eliminate identity-verification requirements that may apply during underwriting.
Does providing an SSN create a personal guarantee?
No.
Providing personal identification alone does not create a personal guarantee. Identity verification and personal guarantees are separate matters. If a personal guarantee is required, it will be disclosed separately within the applicable merchant agreement or underwriting documents.
How is information used?
The reviewing financial institution or payment provider may use identifying information for purposes such as:
- Identity Verification
- Customer Identification Program (CIP)
- Customer Due Diligence (CDD)
- Fraud Prevention
- Risk Assessment
- Merchant Underwriting
- Compliance Review
- Account Establishment
Frequently Asked Questions
Government Resources
These resources explain identity-verification practices used by financial institutions. Specific merchant-account requirements vary depending on the reviewing institution and underwriting policies.
These resources explain identity-verification practices used by financial institutions. Specific merchant-account requirements vary depending on the reviewing institution and underwriting policies.
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