Have you been wondering what the meaning of KYC could be?
Were you in the process of creating a bank account and saw the acronym KYC and wandered the meaning of that?
If you're in that category, welcome to this blog! We have detailedly explained what KYC and Account Tier means in the banking industry and how it can affect one's overall banking experience, please stay tuned!
What is KYC?
KYC is an acronym which means "Know Your Customer" it is a security measure carried out by the banking and payment sector of every financial institution or any organisation which processes payment to customers. KYC is done by having the customers submit certain documentation containing informations about themselves, these documents required for KYC verification includes; passport ID, proof of address, national identity card, driver's license, utility bill, bank verification number (BVN) and so on.
Is it Safe to Upload Your Information For KYC?
Uploading your information for KYC is dependant on the platform which you want to do the verification on, if it's a licensed commercial bank then your safety is 100% guaranteed but if it's an organization that is requesting for your information refrain from performing any verification if it isn't made via a licensed KYC verification service or company as you risk giving your confidential information to scammers who may defraud people using your name.
What is Account Tier?
Account Tier refers to the verification level of a customers bank account, this specifications is common to Fintech's and micro finance banks, there are three main account tier levels, which are;
1. Tier 1:
Tier 1 account is basically for customers who just created a bank account and submitted their personal and contact info such as phone number, house address and so on. Tier 1 account's transaction limit is capped at a daily maximum of #50,000 and a maximum accumulative balance of #300,000.
2. Tier 2
Tier 2 account is a verification level for customers who submitted their personal info and also their bank verification number BVN which matches the name of their account details. Tier 2 customers account is capped at a daily maximum transaction limit of #200,000 and a maximum accumulative balance of #500,000
3. Tier 3
Tier 3 account holders are person's who have submitted their personal info, Bank Verification Number and also their address confirmation, the address confirmation is done by sending in your recent utility bill and also your bank account statement which contains the residential address you highlighted in your personal information. Tier 3 account holders enjoy the highest account capabilities, this means the maximum spend and maximum accumulative balance is higher than the other tier level's. Tier 3 account holders account is capped at a maximum daily transaction limit of 5,000,000 and an unlimited accumulative balance.
Conclusion
If you read through till now you should have properly known what KYC means in banking and also what an account tier signifies so you don't get confused whenever you see these terms been used.
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