Online payments are fast replacing cash transactions with the top payment companies harboring 1billion+ active users. By 2023, global mobile payment transactions will be worth more than £3.5 trillion, as indicated by findings from Allied Market Research. Between 2017-2013, the market is expected to grow at a compound annual growth rate of a staggering 34%.
Merchants are currently supporting various online payment channels including desktop browsers, mobile apps, POS systems, and direct purchases through social media. Support is being developed and furnished for all of these channels, along with additional innovative solutions for a growing online buyer base.
In order to safeguard themselves from online fraud, suppliers are also looking into buyer verification solutions that help you know your buyer, and more importantly to know your buyer’s customer.
Implications for E-commerce and Online Security
According to Worldpay’s 2018 Global Payment Report, the global share of cash as a payment method will decline from 32% in 2018 to a little over 15% by 2022. The same dataset reveals that the use of credit and debit cards has remained steady in this time period, while mobile payments have witnessed a steep rise since 2018. By 2022, e-wallets and other modes of cashless transactions will be just shy of 30% of the point of sale payment (POS) methods globally.
Following potent buying trends in global online payments, a number of security concerns surrounding online transactions need to be accounted for. Both consumers and service providers worry about the new mode of doing business, with privacy and data breaches emerging as the largest barriers to online payment adoption.
Thanks to mobile e-wallets, digital currencies and payment alternatives like PayPal and WePay, opportunities for mobile commerce are also proliferating. As a result, online fraud has become an imminent threat to digital transactions, with 16.7 million victims of identity fraud reported in 2017 alone. Additionally, the Online Fraud Benchmark Report by CyberSource notes a 30% increase in eCommerce fraud attacks compared to 2016.
Previously, financial crimes centered around the misuse of physical credit cards, but as merchants switch to chip-enabled cards and in-store mobile app payments, fraudsters have made the move too. Online fraud activity builds on stolen consumer information with data breaches on the rise, and millions of consumer records exposed to malicious minds.
E-commerce fraud is a double-edged sword, impacting both victims of identity fraud, and suppliers alike. While buyers lose sensitive personal information, merchants find themselves at a larger financial loss. This is because of the reimbursement process following a fraudulent transaction. The seller loses the merchandise ordered by the fraudster, refunds the original buyer, and pays credit card charge-back fees associated with the transaction.
How Know Your Buyer Checks Can Help
Businesses have to look deeper into foolproof methods of providing online services. This means that Know Your Buyer checks are going to be increasingly important in order to safeguard business and financial operations, as well as maintain good industry repute.
Verification providers have also caught up with malicious trends in e-commerce fraud, and tailor Know Your Buyer solutions to provide a risk cover. For a cashless world to be both efficient and safe, extra layers of security at the point of sale is just what is required right now to ensure compliance with know your customer (KYC) regulations.
Buyer Identity Verification
The security of payment networks depends largely on verification of sellers and buyers, to ensure that only genuine transactions are allowed to go through. To know you, buyer, evidence of a member’s identity is collected by verification providers using a Verification API that also provides proof of transaction.
An official ID is required to be submitted by the user, such as a driver’s license, passport, or national identity card. For liveness verification, a selfie will be taken to act as proof of presence, which must match the identity document. This completes the process and tells the seller that a buyer has actually purchased the product.
Keep your community safe by verifying both sellers and buyers, and opt to know your buyer solutions that protect sensitive data from fraud and unauthorized access.
Know Your Buyer solution providers take into account the high volume of e-commerce being reported each year, and thrive to provide seamless buyer verifications. Before making or accepting payments, vendors and buyers are required to complete an identity verification process with high-security protocols. The verification systems must comply with global regulations for AML/KYC/KYB in order for the business to complete Know Your Buyer compliance procedures without friction.
Know Your Buyer Persona
Your customers or your business’ customers can have varied priorities and choose different metrics to steer progress. Using a buyer-centric approach to business expansion and growth will translate into fruitful long-term customer relationships.
Key information and credentials about buyers can also help you know your buyer’s persona in a better way. Buying behavior in the digital age is a key indicator of shaping new plans and promotions and can be gleaned from the channels that the buyer is choosing for a purchase.
Especially true for new entrants, brands can leverage this data to target a specific audience that has shown interest in their product or service. This will also help streamline business policies and schemes if you know your target market, eventually boosting user experience for the end product.
For the safety of growing digital economies, knowing your customers, businesses, and buyers has long-lasting implications. As we continue to embark on new avenues for cashless transactions, complying with essential regulatory directives will help keep us on the right track.