The digital world has transformed significantly over the past decade. The use of mobile devices has become more widespread, with the number of smartphone owners expected to reach 2.87 billion in 2020. Consumer spending patterns too have changed with time. Ever since the proliferation of e-commerce and online buying, people are increasingly preferring to make their purchases through mobile devices and expect their transactions to be fast and seamless. Businesses have to work tirelessly to meet customer expectations and provide safer yet convenient payment processes. Online identity proofing of customers is gaining increasing importance so as to prevent fraud.
In the wake of the eruption of businesses like Amazon making their products available online has been a priority for some of the biggest retailers including Walmart, Target and Ikea. This is due to the fact that customers are increasingly preferring to shop online. The trouble comes in where it comes down to protecting customers and their own businesses from frauds like identity theft and credit card fraud. As fraud statistics continue to rise, regulators encourage businesses to take proactive measures to reduce it. Know Your Customer or KYC requirements are a result of protecting businesses and customers from fraud. Verifying customers has always been key for businesses when conducting transactions. However, before now, they have only used manual and in-person verifications. For online transactions, this method is inapplicable.
Verifying Customers Remotely
The need for verifying customers remotely has stemmed from the need to secure online transactions. Online identity verification allows businesses to authenticate customers using only their smartphone cameras. All the customers have to do is scan their IDs and the verification system can authenticate their identity in real time. This provides users with a seamless interface to complete their purchase, without having to enter lengthy details during checkout. These methods are also more accurate and reliable as they look for fraudulent data and/or stolen credentials.
The plus side for verifying customers remotely for businesses is the fact that they can reduce cases of identity theft and credit card fraud. Businesses end up paying a heavy price for credit card fraud as they have to reimburse the victims, in addition to paying a heavy fine for not implementing robust KYC verification procedures.
Smartphones nowadays are an all in one package, providing increased functionality to users. For identity proofing on online platforms, they serve as the perfect tool for customers to identify and authenticate themselves. The first step of authentication involves the scanning of the customer’s government issued ID. Once the document is verified, the customer can then authenticate their identity through facial biometric verification. This two-step method of verification is foolproof and effective and allows businesses to increase the security of their online transactions. As consumers become more comfortable using smartphones and mobile devices, businesses need to provide a faster, safer and seamless experience thus increasing their competitive advantage. Leveraging the technology in smartphones to provide that experience seems like the perfect solution.