Banking and credit card processing rules say that we need to verify the identity of individuals who ask us to set up payment accounts on behalf of a legal entity (Know Your Customer (KYC) rules). The last 4 digit of your social security number is one of the data elements we can use to verify your identity.
This is analogous to setting up a new bank account or a merchant account with a Payment Facilitator like PayPal, Square or Stripe. In either case, they will verify your identity if you are setting up either a personal or business account.
Additionally, if you are setting up the account to pay yourself we need your full social security number to satisfy both banking Know Your Customer (KYC) rules as well as to satisfy any tax reporting that we may need to do at year-end for payments that we make to you. Banking rules for our Advanced Payment accounts require us to collect the full social security number for any business owner who owns 25% or more of a business entity that sets up a payment account with us.
For more information, see here.