Identity verification is essential in all processes and procedures, both online and offline. It ensures that a person's identity tallies with their original one when they are opening a bank account or completing tax-related electronic transactions; this improves efficiency by preventing fraudsters from stealing money.
KYC (Know Your Customer) verification is conducted to confirm the identity of an individual or a business. The process involves examining documents that prove the first name & last name, date of birth, and residential address of the person in question. SEON's article on KYC verification provides an in-depth insight into the importance of user verification.
The identifying information lets businesses know who they're dealing with and helps prevent fraudsters from using false identities to commit crimes. Online retailers can build trust with their customers and ensure that only legitimate transactions are conducted.
Online retailers can decide whether to perform the verification before a person becomes a customer or during the process. The former allows data to be stored in a database that the retailer can access whenever they want. At the same time, the latter is more convenient for customers as they do not have to provide their information if they are unsure about making the purchase.
Let’s dive into the benefits of identity verification for online retailers:
Benefits Of Identity Verification
Improves Your Reputation
It authenticates the reputation that companies have worked hard on and enhances it, making sure others know who you really are.
Trust is important for success in any industry. In the digital world, where people can switch preferences or businesses if they're not getting what's needed from you - whether it’s service quality or price points - there needs to be security that ensures customers feel safe buying your products/services without worry about their identity being stolen by someone else.
Financial institutions are turning to third-party identity verification tools in order to verify customers' documents and match face filters with selfies, thus saving time. SEON’s KYC verification is an example of just that.
Enhance Your Customer’s Experience
Companies are increasingly using digital workflow to provide a seamless onboarding experience for their customers. By eliminating paperwork, these processes allow users instant access and an easy way of getting started with the product or service offered by online retailers - all with minimal wait time!
The identity verification steps that most online retailers follow are:
Gathering customer’s ID documents and verifying if the documents are authentic. Other than customer authentication, sometimes a report is also generated for auditing purposes.
An identity verification process that is done digitally makes the process seamless for online retailers.
Saves You From Frauds
Identity verification is a necessary component of any financial transaction, and the absence thereof can be risky. Some risks are fraud or money laundering; one way that companies address this concern is through risk-based models which employ identity checks on users before allowing them access to sensitive information like credit card numbers.
Online retailers are likely to become victims of fraudulent activities. According to the Federal Trade Commission (FTC), more than 2.8 million fraud reports were received last year. The top category was imposter scams which were followed by the online shopping scam.
Someone pretending to be from a well-known organization and asking for money is part of an imposter scam. An online shopping scam, on the other hand, is when an online retailer ships you fake products or doesn’t ship anything at all after you have made the payment. Both these types of fraud can be prevented if retailers verify their customer’s identities.
Saves you from hefty fines
Identity verification can also help online retailers comply with regulations, such as the requirements of the General Data Protection Regulation (GDPR). By verifying the identities of their customers, retailers can ensure that they are only collecting and storing the personal data of people who have given their consent. Online businesses need to understand the importance of adhering to KYC compliance.
Online retailers have to pay hefty fines if there is non-compliance with policies. For example, the General Data Protection Regulation (GDPR) in the European Union (EU) has a maximum fine of €10 million or 2% of the company’s global annual revenue - whichever is greater - if found in violation of the regulation.
So, it’s not just about avoiding fraudsters but also staying compliant with the law!
Increases the Ease of Doing Business Online
The ease of doing business online is essential for the global economy. When you're able to quickly identify and verify the identity of a customer or client, it streamlines transactions and allows for greater efficiency in day-to-day operations.
In the past, one of the main barriers to conducting business online was the lack of trust. Customers were worried about sharing their personal information with businesses, and businesses were worried about the potential for fraud.
Customers who know that their identities have been verified are more likely to feel confident about doing business with the retailer. This can lead to repeat customers and positive word-of-mouth marketing.
With the advent of new technologies, identity verification has become more sophisticated and reliable, making it possible to conduct business online with confidence.
Remote Hiring Becomes Easier
Manage your remote staff and outsourced services more effectively. Before identity verification was common, hiring remotely was not even a question. The ability to trust a person after you meet with them in person is unparalleled.
The closest thing a person can get to remote hiring is by using identity verification - an affordable solution that allows you to verify someone's identity in as quick as under five minutes!
Increase in the Revenue Stream
Every online retailer aims to improve its profitability and reduce the chances of getting its revenue stream hampered. Merchants are often threatened by fraudsters who make use of someone else’s credit cards.
Stolen credit cards are mostly used online since criminals have a higher chance of remaining undetected. If online retailers do not have a verification system in place, there is a higher chance that they may face the repercussions of chargebacks which can include:
- An increase in the processing costs
- Merchant account termination
With an identity verification system in place, online retailers do not have to worry about losing their account with a card brand. In addition to that, chargebacks also lead to disputes which cost time and money to resolve.
Saves Time for Customers
Imagine being a regular customer of an online store and having to enter your address and other information each time you make a purchase. Seems like a hassle, right? Increasing the steps at the checkout step makes potential customers abandon their carts out of frustration.
Now, imagine if the same store had a system in place that could verify your identity and automatically populate your information at checkout. You would have to enter their information only once initially and then make their subsequent purchases in a lesser amount of time.
Identity verification can save customers time by eliminating the need to enter their information each time they make a purchase. The purchasing process also becomes much smoother.
Wrapping Up The Benefits of Identity Verification for Online Retailers
Overall, identity verification can provide many benefits for online retailers. Perhaps the most obvious benefit is that it helps to ensure that customers are who they say they are. This can help to prevent fraud and protect the retailer's reputation. In addition to that, online verification can help online retailers to comply with regulations.
In other words, the process of online verification is like a circle. Allowing verified customers on your online platform increases the level of trust which improves your brand reputation which in turn attracts more verified customers!
This virtuous circle of trust can be created by any online retailer and the process begins with identity verification.
Implementing an identity verification solution can be a wise decision for any online retailer as they can create a more trustworthy relationship with their potential and existing customers and streamline their business operations. In a world where customers have countless options, these benefits can help online retailers stand out from the competition.
Osama is a technology content strategist who is passionate about content marketing and all things SEO. He has helped various companies in ranking their content on the first page of SERPs. In his free time, Osama loves to play football and travel.