Efficient Identity Verification (KYC)

For SMEs operating in regulated industries such as finance, legal services, travel, or e-commerce, Know Your Customer (KYC) and identity verification are critical for compliance and fraud prevention. However, traditional KYC processes often require customers to repeatedly submit the same documents to multiple providers. This reliance on manual checks, siloed databases, and redundant processes makes onboarding slow, costly, and frustrating for both businesses and customers.

Blockchain-based digital identity verification solves this by enabling decentralized, verifiable credentials. Customers complete identity verification once with a trusted authority, which issues them a blockchain-anchored credential stored in a secure digital wallet. When onboarding with a new SME, the customer simply grants permission to share their verified credentials, and the SME’s system instantly confirms authenticity on the blockchain without handling raw documents or sensitive personal data. This reduces friction, speeds up onboarding, and minimizes the SME’s liability exposure.

How SAHEL Adds Value
The SAHEL token enhances blockchain-based KYC in several ways:

• Access to Verification Services – SMEs can use SAHEL to pay for registering and validating credentials with blockchain-based identity providers, reducing friction in adopting these systems.

• Incentivizing Compliance – Customers who complete KYC or keep their identity credentials up to date can be rewarded in SAHEL tokens, encouraging proactive compliance while fostering loyalty.

• Shared Ecosystem – A consortium of SMEs using SAHEL could create a shared KYC infrastructure, where verified credentials are interoperable across businesses, reducing costs and duplication.

• Integration with Business Processes – Verified credentials can also serve as access controls for blockchain-powered services that transact directly in SAHEL, such as loyalty programs, payments, or supply chain applications.

How It Works in Practice
A fintech SME needs to onboard a new client. The client already has a verified blockchain identity from a licensed KYC provider. Through the SME’s web portal, the client connects their wallet and approves a request to share only the necessary details (e.g., name, date of birth, address). The SME pays the verification fee in SAHEL tokens through the identity provider’s platform. Once verified, the client also receives a small SAHEL reward for successfully completing onboarding, creating both trust and engagement.

Technical Implementation Steps

1. Select an Identity Framework – Adopt standards like DID (Decentralized Identifiers) and Verifiable Credentials (W3C), supported by Sovrin, uPort, or Hyperledger Indy.

2. Partner with a KYC Provider – Work with regulated providers that issue blockchain-verifiable credentials.

3. Integrate Wallet Support – Add compatibility for digital identity wallets (e.g., Bloom, Trinsic, or custom SME apps) to enable seamless customer interaction.

4. Verification Logic – Implement a backend system that checks credential signatures against the blockchain to confirm validity and ensure they haven’t been revoked.

5. Data Minimization – Only request and store what is necessary. Keep hashes or logs on-chain, with sensitive information stored securely off-chain or not stored at all.

6. Payment and Incentives in SAHEL – Use SAHEL for transaction fees, verification services, and optional customer rewards.

7. Audit and Compliance – Maintain on-chain proofs of verification to demonstrate compliance during regulatory audits.

Example Implementation
A cross-border payments SME integrates a decentralized identity system. Customers complete their first verification with a licensed partner, which issues verifiable credentials. The SME pays the provider in SAHEL tokens to access the service. When customers open an account, they scan a QR code, approve the credential share, and their identity is instantly verified. As a bonus, each new customer receives a small SAHEL token reward, which can later be used within the SME’s ecosystem for transaction fees or loyalty programs. The SME avoids storing sensitive documents, reduces compliance costs, and improves customer trust.

Benefits for SMEs

• Faster Onboarding – Identity checks drop from days to minutes.

• Enhanced Security – Reduces the need to hold sensitive personal data.

• Regulatory Compliance – Satisfies KYC/AML rules with blockchain proofs.

• Cost Efficiency – Shared blockchain infrastructure lowers verification costs.

• Customer Engagement – Incentives in SAHEL encourage adoption and trust.