Kolodistyi urges merchant digital IDs to curb fraud

Vladyslav Kolodistyi urged companies in payments, marketplaces and financial services to create merchant digital identities so businesses can be verified as reliably as customers. He called on firms to make merchant identity a standard part of digital onboarding and ongoing monitoring.

Merchant digital identity refers to verifiable digital credentials tied to a company’s legal status, ownership and payment relationships. Examples include company registration numbers, tax identifiers, verified bank or acquirer accounts and attestations of beneficial ownership. Credentials can be issued through trusted registries or interoperable identity services.

Kolodistyi argued that merchant IDs can replace manual document checks with machine-readable proofs and speed onboarding. He said clearer digital links between accounts and legal entities can reduce chargebacks and make it harder for bad actors to pose as legitimate sellers. Reliable merchant records can also support checks for anti-money-laundering and sanctions screening.

Implementing merchant identities requires agreement on technical standards and data sharing. Firms must decide which attributes to verify, who issues and maintains credentials, and how to protect sensitive corporate data. Small and medium-sized businesses may face costs to obtain verified credentials. Companies that use merchant IDs must address privacy, consent and contractual access to verification data.

Technology options include digital certificates, cryptographic signatures and registry lookups, as well as commercial identity platforms that aggregate corporate records from public and private sources. Kolodistyi recommended coordination among banks, payment service providers, marketplaces and regulators so credentials are accepted across the ecosystem rather than recreated for each platform.

Regulatory rules that require checks on beneficial ownership and enhanced monitoring for higher-risk commercial relationships increase the demand for reliable digital records. Kolodistyi encouraged pilot projects and shared technical standards to test credential formats, verification chains and governance models.

He advised firms to begin by mapping the attributes they need to verify and by engaging partners that can help issue or validate merchant credentials.