See the following from Identity verification for Apple Card or Apple Cash - Apple Support
When you'll be asked to verify your identity
You'll be asked to verify your identity based on how much you use Apple Cash. You may not add or receive $500 or more in total without verifying your identity. You might also be asked to verify your identity prior to this limit.
To protect your account and the security of your money, you might be asked to verify your identity when using Apple Cash, even if you have previously done so.
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Where is your personal information going
Information that you provide will be sent to Green Dot Bank and their identity verification service provider. Your name and address is securely stored by the partner bank and Apple Payments Inc. If asked, social security number, date of birth, answers to questions (e.g. confirm street name you have previously lived on), or a copy of your government ID will be provided to Green Dot Bank and their identity service provider, and stored by Green Dot Bank as long as required by law. This additional information cannot be read by Apple.
Apple created Apple Payments Inc., a wholly owned subsidiary, to protect your privacy by storing and processing information separately from the rest of Apple and in a way that the rest of Apple doesn’t know.