How to Integrate KYC in Web Applications

Streamlining User Verification: Integrating KYC in Web Applications

Introduction to KYC

KYC stands for Know Your Customer, a process by which banks and financial institutions verify the identity, suitability, and risks involved in maintaining a business relationship with a customer. KYC procedures are crucial for preventing identity theft, financial fraud, money laundering, and terrorist financing.

Why are Aadhaar and PAN Cards Required for KYC, and Why is KYC Important?

In the modern financial landscape, Know Your Customer (KYC) regulations are a cornerstone of secure and transparent financial practices. 

Central to these regulations in India are two key documents: the Aadhaar card and the PAN card. 

This blog will explore why these verifications are necessary and how businesses can integrate them into their operations.

Why is KYC necessary?

Strengthens Security: Verifying identities creates a barrier against fraudsters and protects your business from financial crimes.

Ensures Compliance: Many regulations require businesses to perform KYC checks. Adhering to these protocols keeps you on the right side of the law and helps avoid hefty fines.

Builds Customer Trust: A secure environment fosters trust with your customers. KYC demonstrates your commitment to protecting their information and creates a positive user experience.

Why is an Aadhaar Card needed for KYC?

The Aadhaar card, issued by the Unique Identification Authority of India (UIDAI), is a unique 12-digit identification number linked to an individual’s biometric and demographic data. Here's why it's crucial for KYC:

1. Unique Identification: Aadhaar provides a unique identification number that is difficult to duplicate, ensuring that each individual can be distinctly verified.
2. Comprehensive Data: It includes both biometric (fingerprints, iris scan) and demographic (name, address, date of birth) data, making it a robust form of identification.
3. Ease of Verification: The digital nature of Aadhaar allows for quick and efficient online verification, which is convenient for both institutions and customers.
4. Government Endorsement: Aadhaar is a government-endorsed ID, adding an extra layer of trust and reliability to the verification process.

Why is a PAN Card Required for KYC?

The Permanent Account Number (PAN) card, issued by the Income Tax Department of India, is a unique 10-character alphanumeric identifier. 

Its importance for KYC includes:

1. Financial Identity: PAN is primarily used for tracking financial transactions and ensuring that all financial activities of an individual are linked, making it indispensable for financial KYC processes.
2. Tax Compliance: It helps in maintaining tax compliance by linking all taxable transactions. This is crucial for preventing tax evasion and ensuring that individuals and businesses are paying their due taxes.
3. Verification of Financial History: A PAN card allows financial institutions to access the financial history of an individual, helping them assess creditworthiness and financial behavior.

Providers for KYC:

Several KYC verification providers are available, such as Dcentro, Cashfree, and Signzy.

This blog focuses specifically on Signzy and its integration process. Signzy offers a robust and user-friendly API that simplifies KYC compliance for your business.

The KYC Verification Process: 3 Steps to Compliance

Signzy provides various Aadhar verifications, pan verification, and many other APIs that can be used for the KYC process and other purposes. Follow these three steps to ensure compliance:

  Sign Up for Signzy: 

• Visit Signzy's website and create an account. They offer various plans to suit your business needs. After connecting with the Signzy team, you can request access to the test environment.

Explore the Test Environment:

• By using the test environment, you can explore all the APIs. Testing these APIs will help you compile a list of those required for your project or business. 

Obtain API Credentials: 

• Once registered, you'll receive API keys to connect your application to Signzy's verification services.

Integrating Aadhaar Card and PAN Card Verification with Signzy.

This section discusses the integration of Aadhaar card and PAN card verification using Signzy, covering request and response handling.

When you log in to the Signzy portal, click on the "API Catalog" on the left-hand side. This will display several sections of APIs for different modules.

Aadhaar verification: 

• To see various Aadhar APIs, navigate to the Aadhaar Section. Choose the API based on your business requirements.
• If you select "Aadhaar Basic Verification," you will see brief information about that API. A "Try out this API" button is located on the right-hand side. Clicking on it will allow you to access a sample API. 

Below is a sample CURL request for this API:

curl --location 'https://api-preproduction.signzy.app/api/v3/aadhaar/verify' \
 \ --header 'Authorization: Rzr59wskywkaxTNfrLv77teu94369' \
 \ --header 'Content-Type: application/json' \
 \ --data \
-raw '{ "uid": "12 digit aadhaar number" }'

For Success Response

You will get a sample success response like this:

"result": {
  "verified": "true",
  "ageBand": "20-30",
  "state": "Gujarat",
  "mobileNumber": "*******409",
  "gender": "MALE"
}

For Failure Response 

You will get a sample failure response like this:-

  {
    "error": {
        "name": "error",
        "message": "error message",
        "status": "error statis",
        "statusCode": error code
    }
}  

Error Codes for Failure Response

The failure response for the above Aadhaar API may include the following error codes, along with their reasons:

Pan Verification:

• To access PAN verification, navigate to the PAN section, where you can see various PAN APIs. Choose the API based on your business requirements.
• Selecting "Pan Simple" will provide brief information about that API. A "Try out this API" button is located on the right-hand side. Clicking on it will allow you to access a sample API.

Below is a sample CURL request for this API:

curl --location 'https://api-preproduction.signzy.app/api/v3/pan/simple' \
 \--header 'Authorization: Rzr59wskywkaxTNfrLv77teu94369' \
 \--header 'Content-Type: application/json' \
 \--data \
-raw '{
"panNumber": "PAN NUMBER"
}'

For Success Response

You will get a sample response like this:- 

 "result": {
  "name": "DIVYANSH SHARMA",
  "firstName": "DIVYANSH",
  "middleName": "SOMABHAI",
  "lastName": "SHARMA",
  "panStatus": "VALID",
  "dob": "2002-10-12"
}

For Failure Response 

You will get a sample failure response like this:-

  {
    "error": {
        "name": "error",
        "message": "error message",
        "status": "error statis",
        "statusCode": error code
    }
}  

Error Codes for Failure Response

The failure response for above Pan API may include the following error codes, along with their reasons:

Conclusion

Incorporating KYC (Know Your Customer) procedures into your web application is essential for building trust, ensuring compliance, and safeguarding your business from fraud. This blog post explored the significance of KYC, the crucial roles of Aadhaar and PAN cards in Indian KYC processes, and how Signzy simplifies KYC integration.

Remember

KYC regulations are constantly evolving, so staying informed about the latest requirements is crucial.

Signzy offers a variety of KYC APIs beyond Aadhaar and PAN verification. Explore their API catalog to discover solutions tailored to your specific needs.

Security is paramount when handling sensitive user data. Ensure your application adheres to best practices for data security and privacy.

By following these guidelines and leveraging Signzy's KYC solutions, you can streamline user verification, enhance security, and build a more trustworthy user experience for your web application.