Balanced payments documentation is unclear about debits and credits. You have merchants, customers and accounts. It now says accounts are deprecated and to use customer. Can someone shed light on any corrections I have in my workflow:
Do I need the merchant fields on the second customer object (dob, postal code, etc)? Do I need to do underwriting to second customer object?
Your workflow is correct.
The Customer resource abstracts away from you the pain the Account resource had when dealing with underwriting a merchant. Underwriting is required as part of the KYC (Know Your Customer) operation requirements Balanced needs to follow. Each Customer has an attribute named is_identity_verified where you can know if the Customer's identity was verified. Ideally you want to make sure the identity is verified for each Customer to which you will be crediting. While you can still perform credits (I believe up to a certain limit) to Customers whose identity is not verified, you run the risk of increased fraud and there may eventually be consequences to your marketplace.
Also, feel free to stop by #balanced on IRC. You'll probably get much faster answers to your questions there directly from developers.