12 Ways Identity Verification Services are Helping Online Businesses
The online marketplace has a culminating presence in the business world. Worldwide e-commerce sales are expected to reach an astounding $4.8 trillion by the end of 2021. Additionally, the cumulative number of online shoppers reaching over 2.1 billion. Moreover, recent studies have reported a 277% increase in global e-commerce sales over the past few years. Online merchants must fight to maintain their competitive advantage when stakes are this high. An automated Know Your Customer (KYC) verification solution can enable them to build a seamless experience. Here are 15 ways in which online businesses can enjoy identity verification services.
Ways in Which it Enhances Security
Clamping Down the Potential for Fraud
Online businesses, in particular, are more prone as well as vulnerable to fraud. Cases of identity theft and credit card fraud are common in e-commerce stores. Businesses often receive requests for refunds when a fraudulent transaction made. An identity proofing solution helps in curbing the potential for fraud by verifying users remotely. This results in the reduction of chargebacks and an increase in profits.
Protect Your Reputation in the Market
Online stores that are vulnerable to data breaches and has shoddy cybersecurity systems tend to build up a bad reputation in the online market space. Similarly, when a company incurs one too many chargebacks, it tends to lose its goodwill amongst its customers. This can be remedied by implementing an identity authentication method that can verify consumer identities within seconds. By fixing the loopholes in their security structures, businesses can protect their user data as well as protect their reputations in the market and among customers.
Shield Customers From Inflated Prices
Online frauds including identity theft and credit card fraud end up increasing chargebacks and fines for businesses. This, in turn, makes a dent in the company’s bottom line and thus forces them to increase their prices to cover these costs. Retailers can protect customers from price increases that are uncalled for. With a sound KYC system in place, businesses can eliminate the threat of fraud in the first place.
Avoid Costly Lawsuits and Fines
Frequent cases of credit card fraud and identity theft in a business can lead to questions about its online security. It can, therefore, lead to elaborate lawsuits from victims affected by identity fraud. On top of that, credit card companies also tend to sanction merchants who do not observe better fraud prevention measures. Additionally, there are businesses that offer age sensitive products or services. They are legally bound to verify the age of their users. All these problems can be easily addressed by an identity verification system such as Shufti Pro that offers an AI-based solution for KYC verifications that also include age verification services along with facial recognition and ID authentication.
Protect Your Customers
The foremost advantage an identity authentication system presents for businesses is that it enables them to protect their customers from the fallout of fraudulent transactions. Identity fraud can go unnoticed for weeks, even months on end, allowing the perpetrator to accumulate charges on a person’s credit card. Online ID verification instantly detects a fraudulent user and blocks his/her access before they can cause any significant damage.
How Identity Verification Services Can Improve Sales and Conversions?
Enhancing the Purchase Process
Over 13% of online customers abandon their purchases due to poor and lengthy customer verification procedures. A number of online websites have complicated purchase processes that require elaborate information from customers in order for them to proceed with their purchase. Sometimes customers are even asked to enter details more than once, thus increasing their frustration. This eventually leads to higher purchase abandonment levels which ultimately drives down sales. An efficient identity proofing system for customers can make life easier on both sides.
With a system like Shufti Pro businesses can implement OCR (Optical Character Recognition) to extract data from a user’s documents verifying their identities at the same time. It significantly reduces the time for data entry and allows for increased accuracy, thereby reducing human error. Automated KYC systems have therefore made the purchase process easier for both the customers as well as retailers and has consequently resulted in increased sales.
Reducing the Cost of Online Fraud
As the rate of online frauds decreases with a more efficient user verification process, the resultant costs naturally fall. The reduced costs ultimately lead to increased profits creating a win-win situation for online retailers. It also reduces the number of chargebacks and fines for companies, ultimately leading to an increase in their revenues.
Personalising Offers for Customers
Once a customer’s details are obtained through a verification system, a company can make use of them to identify returning customers. This also enables marketing teams to personalise products or services for customers and target them in a more efficient manner. This practice can significantly impact customer experience, making them feel more valued, resulting in their prolonged lifetime value.
Complying With Global Regulations
One of the biggest incentives for businesses to implement an effective KYC system is to comply with global compliance regulations. Regulatory authorities – both national and international – have been highly active over the past couple of years to curb money laundering activities. In an attempt to make sure that businesses comply with regulatory requirements, authorities have started sanctioning banking institutions. Over the past decade, the financial sector has faced nearly $26 billion in fines.
KYC services enable businesses to comply with worldwide regulatory requirements effectively by identifying and verifying clients more accurately. Service providers like Shufti Pro also offer AML screening services that allow businesses to screen high-risk individuals through global sanction lists to identify Politically Exposed Persons (PEPs). Online identity verification, therefore, makes complying with global regulations easier for businesses.
Building Trust Among Customers
When online businesses take active measures to prevent fraud and comply with legal and ethical obligations, they tend to build trust amongst customers. Merchants that experience little or no cases of credit card fraud tend to have a good reputation amongst customers and end up acquiring customers for life.
Providing a Seamless Customer Experience
Another advantage of online identity authentication services is that it reduces a significant amount of hassle for customers. It tends to reduce the time it takes for the customers to enter their details. It further reduces the time it takes them to verify themselves and their credentials through facial recognition and document verification. With verification time reduced to under a minute, customers are able to complete the purchase within minutes. KYC service providers like Shufti Pro are able to provide the sort of seamless experience for businesses and their users that can enable them to reduce cut down their purchase abandonment rates.
Reduce Errors in Shipping
Manual data entry methods are prone to errors – both on part of the merchant as well as the customer. With digital identity verification, e-retailers can reduce these errors through a service like instant capture from Shufti Pro. The service uses OCR to extract data from a user’s document in addition to verifying them. This reduces both the time and number of errors for e-commerce retailers.