Seamless travel — how identity verification technology is improving the travel industry
International Air Transport Association research states that the number of air travelers is expected to nearly double from 4.2 billion in 2018 to 8.2 billion by 2037. Consider that for each air traveler — and almost every traveler in general — identity verification is a requirement for many parts of the journey.
From sharing accommodation to booking a flight to cross-border travel — identity is the cornerstone to creating the necessary trust to promise a room, a seat on a flight, or entrance to a country. Especially for consumers to be willing to use sharing economy services, they must feel confident that the individual on the other end of that transaction is a real person and a trustworthy one. Verified identities create trust and give users the confidence of knowing who they’re dealing with. Ultimately, this trust contributes to business growth by attracting new users, who would otherwise not be willing to participate in the sharing economy or other types of digital transactions.
We are in a world where proof of identity has become essential for access to goods and services, but when criminals gain access to our identity information, the consequences can be devastating. According to a global study, the total cost of fraud for travel companies is a whopping USD $21 billion, and it is expected to exceed USD $25 billion by 2020. Thus, it’s critical for travel businesses to perform identity verification to a high level of confidence if they want to keep fraudulent activity at bay — to put a strong front door in place now rather than having to remediate fraudulently opened accounts at a later stage.
As the whole gamut of travel and shared economy services are growing, there are more opportunities for innovation in identity verification to gain competitive advantages. Those opportunities fall into three main areas.
Trust and safety for the travel sharing economy
Consider the risk of a stranger staying in your home or you staying in a stranger’s home. How can you be sure the person you’re dealing with is who they say they are and not a scammer, fraudster or criminal?
Overall, 111 million consumers use some type of sharing economy platform to enhance their day-to-day life. It’s critical for such businesses to be able to build quality relationships with complete strangers while also reducing the risk of fraud and criminal activities. Thus, trust and safety are highly valuable to travel businesses that need to protect both the reputation and the security of their ecosystems.
Threats to trust and safety can take many forms depending on the business model. This applies especially to travel applications of the sharing economy such apartment/house renting and couch surfing, ridesharing and carsharing.
On the other hand, criminals have long been exploiting online marketplaces for money laundering purposes, and the latest service to reportedly fall prey to fraudsters is a leading accommodation-sharing platform. Cybercriminals are leveraging such services to launder dirty cash from stolen credit cards with the help of corrupt hosts. They also continue using more “traditional” laundering methods, especially in the form of “bank drops” and gift card purchases.
In order to protect their ecosystems, travel businesses need to adequately vet new users to establish that a person’s digital identity (who they claim to be) matches their real-world identity (who they truly are). Building a better trust infrastructure is possible now – thanks to online identity verification, which helps businesses strike a balance between fraud detection and user conversion.
Convenience for travel booking and boarding
The travel industry is continually challenged to create faster and more intuitive mobile experiences that are both secure and convenient for travelers. With the help of digital ID scanning and electronic identity verification, customers and businesses experience far-reaching benefits.
Breakthroughs in biometric and digital identity innovation, including facial recognition technology, may be the answer to strains on security systems and processes from increases in travel and geopolitical risks. WTTC’s Seamless Traveller Journey vision is that travelers will no longer have to repeatedly present travel documents, boarding passes, and booking confirmations numerous times to multiple stakeholders at different stages of their journey. Instead, they will be able to book transportation, check in, proceed through security, cross borders, board aircraft and collect baggage, simply by confirming their identity and booking data. This process has the potential to extend to rental car agencies, hotels, cruise ship lines and other travel providers outside the airport security environment. Upsides include improved security and the possibility to streamline and heighten customer experience.
Consider the airline industry as an example: the existing passport checks are onerous, take a great deal of time to carry out, and are a major source of frustration for passengers. Emerging identity techniques, on the other hand, are much more traveler-centric. They are designed to enable a more convenient and faster process to remove friction and improve the experience. The processing of travelers through border controls and the checking of documents again immediately before boarding the plane are both significant causes of delay and constrain an airport’s capacity. If these processes are made faster, the air industry will be better able to meet the projected growth in air travel, which is expected to double by 2030. More efficient passenger processing can ease congestion and raise capacity in existing travel infrastructure. And this is becoming a reality with the recent pilot program between Canada and the Netherlands in creating seamless air travel experience for passengers by using new biometrics, like facial recognition and fingerprint scanners, that would be stored digitally in the place of traditional paper passports.
Compliance for regulations affecting travel
Regulators today face a growing chorus of concern over security, consumer privacy and data protection online. In the course of capturing and verifying identity information, companies expose a range of personal identifying information (PII). Some of the key regulations, such as the California Consumer Privacy Act (CCPA), the General Data Protection Regulation (GDPR), PSD2 – Strong Customer Authentication (SCA), APIS data capture and Payment Card Industry Data Security Standard (PCI DSS) affect the travel industry. With an ever-growing regulatory landscape, it is critical to adopt identity verification solutions that adhere to legislation, guidelines and directives put in place by regulatory authorities and international watchdogs for Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance.
The travel industry is booming at the moment and has the potential to generate even higher revenues. Only a reliable and robust identity verification system can supplement the revenue growth and protect businesses related to the travel industry from identity fraud and cashback requests. Modern online identity verification methods also provide the flexibility of designing a simple and streamlined customer journey that can help optimize conversions while at the same time keeping customer data secure, effectively deterring would-be fraudsters.