E-commerce and online retail have been around for a long time. Unfortunately, menaces like identity fraud and scams have been around longer. Online fraud has affected businesses in the most adverse manner; it rose by over 30 percent in 2017 alone. Such an alarming increase in fraudulent activity calls for businesses to implement sound identity checks. Such checks are the most important step toward fraud prevention.
There are a number of verification checks that allow online retailers and service providers to reduce the risk of scams. However, manually verifying customers can be a long process and can increase the cost of doing business immensely. Here is a list of reasons why online businesses need to take steps towards identity verification;
The Increase in Online Fraud
Perhaps the most essential and obvious reason for online businesses to adopt ID verification solutions is continually increasing internet fraud. Criminals these days tend to be high tech as well, enabling them to come up with new ways to scam online users. The statistics in the rise of fraud in the e-commerce sector are astronomical. Studies reported overall losses of 57.8 billion US dollars to e-commerce in just eight major industries in the year 2017. If scams continue to rise at this rate, online businesses will have to move faster and adopt some fraud prevention techniques.
A significant amount is lost by businesses when they face chargebacks due to fraudulent transactions. Not only are they forced to reimburse the defrauded customer(s) but they are also fined for not complying with necessary identity verification checks to validate customers and transactions. It causes them to incur not only financial losses but losses in terms of reputation and reliability as well.
Build Customer Confidence
Initiating fraud prevention measures in the form of identity checks makes the customers believe that you are serious about maintaining safe business practices. It can also lead them to believe that they will not be at risk of identity fraud from your website. But once a customer knows that your website is prone or vulnerable to data security issues they can lose confidence fast, making you bleed profits.
Decrease Errors in Shipping
Customer authentication checks are not only used to reduce internet fraud. They can also reduce errors that occur at the time of ordering and delivery. Most ID verification solutions providers offer address verification services. This can allow businesses to verify their customer’s order with the help of their utility bill or an ID document. This ensures a smooth shipping process for online retailers.
Achieve Compliance Requirements
A lot of federal and state governments have been increasingly issuing compliance requirements that a business needs to fulfil. Know your customer (KYC) verification requirements are one amongst such regulations. They are put forth by governments in order to reduce fraudulent activities across the internet. By implementing ID verification businesses can thereby increase their compliance requirements.
Alex is fascinated with “understanding” people. It’s actually what drives everything he does. He believes in a thoughtful exploration of how you shape your thoughts, experience of the world.