With billions of smartphones circulating globally, customers can transact online regardless of location. This instant, ubiquitous access to the internet has seen the world’s economy change drastically. As a result of this move towards digital, 77 percent of UK adults have, at some point, paid for goods or services online. Customer expectations are changing and the need to provide seamless, secure online payment options is now a necessity.
This presents a challenge for merchant service providers, as the sheer scale of transactions taking place online every second offers unprecedented opportunities for bad actors. Merchants now need to present a frictionless online payment option while simultaneously managing risk and mitigating instances of fraud.
As technologies develop at an exponential rate, criminals too are turning to increasingly sophisticated methods to commit fraud and launder money. These same factors that make online transactions a huge draw for customers and merchants also attract the attention of bad actors. In particular, there has been a sharp increase in marketplace fraud. To drive adoption, these marketplaces want to remove as many barriers at the front gate as possible. However, often this comes at the expense of fraud, as it can reduce focus on risk prevention and leave the door wide open for criminals to prey on legitimate customers. This emerging type of fraud largely occurs on peer-to-peer (P2P) marketplaces such as Gumtree, where fraudsters create product listings with the intention of scamming buyers. Personally identifiable information (PII) obtained from data breaches, malware, phishing and other techniques enables fraudsters to pose as real customers or create synthetic identities that seem real.
Harnessing the economic benefits of this new borderless society
For those looking to harness the economic benefits of this new borderless society, it has become essential to have an identity verification process that’s not only secure, but can scale quickly and efficiently and provide an enjoyable user experience for the customer. Without it, companies need to spend valuable time and money creating separate customer onboarding processes for each and every country they operate in to meet a wide range of regulatory requirements.
It is now possible, using an application programming interface (API), to have secure, instant access to hundreds of data sources across the world. This can be used in conjunction with new technology that provides the ability for developers to instantly and easily verify customers in multiple markets, while supporting country-specific Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements. Embedding a snippet of code to their website, particularly the sign-up or registration form, enables instant identity verification. In turn, this allows companies to place identity verification at the very beginning of merchant onboarding, and the same instantaneity makes it easy to verify the identities of existing merchants. As a result, companies are able to understand their entire consumer base quickly and take timely cognisance of any risks that their merchants might pose.
Looking back at the evolution of the way we do business, different technological breakthroughs have catalysed their sector in different ways. The revolution in online payments was one such breakthrough: seamless identity verification is on the cusp of being the next. Scalable, adaptable, trusted technologies are the logical step forward in providing top customer experiences and frictionless online transactions while managing risk, meeting regulatory requirements and blocking those that pose a threat.
This post first appeared on Finextra.