Article 6 min

Seamless travel — how identity verification technology is improving the travel industry

identity verification - travel industry
identity verification - 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. Whether a traveler is buying a ticket for an international flight, renting a car or booking into a hotel, chances are they’ll be asked to prove who they are. Verifying a traveler’s identity, whether by looking at their passport, checking their name and date of birth against a database, or scanning their irises, is a step toward establishing trust. It’s important for hotels, cruise lines, and car rental agencies to know that the person they’re serving has a real identity.

Customers also seek the security of knowing they’re buying a real, valid service from a trustworthy vendor. This is especially true when dealing with digital purchases of economy services, or dealing with the sharing economy through online platforms. It’s important for those using marketplaces for travel, booking rooms in strangers’ homes or catching rides in their cars, to know that the people on both sides of the exchange are trustworthy.

When criminals are able to successfully pose as legitimate consumers, 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. Businesses in the travel industry need to put strong identity verification processes in place to stop criminals at the point of account creation, before they can use that account to commit fraud.

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.

The potential for damage caused by threats to trust and safety varies greatly depending on how a given business operates. 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. Corrupt hosts have been working with criminals to launder money and extract cash from stolen credit cards, alongside more traditional methods for committing these crimes.

To protect themselves from becoming a target for organized crime, travel businesses need to be able to quickly establish whether new users are who they say they are. With online identity verification, it’s now possible to integrate fraud detection with customer conversion, creating a better trust infrastructure for both customers and businesses.

Convenience for travel booking and boarding

Like most industries, the travel industry is constantly striving to create better customer experiences for mobile devices. Additionally, with location-based services and built-in cameras, mobile devices are especially well suited to creating innovative new travel applications. However, security on the move is always going to be an issue.

With the ability to digitally scan ID documents and electronically verify identity data, customers and businesses can safely use mobile travel apps in a range of new ways that wouldn’t otherwise be feasible. Additionally, biometric identification has the potential to become part of tomorrow’s security framework, for interactions with businesses and with governments.

It’s possible that in the future, travelers will no longer need to present physical documents to check in at the airport, board their plane, collect their baggage, transit immigration and collect their rental car at the other end of their journey. The same technology that could enable passengers to do all of this with only their booking data and the ability to confirm their identity using digital or biometric means could extend to cover all aspects of the travel industry, from hotels and cruise ships to hiring vehicles or even deck chairs.

Streamlining the purchase and booking process is just the start. For airport security or the travel industry outside the airport, the additional security and assurance these systems provide for businesses and their customers are set to improve everyone’s experience.

Because the travel industry is so competitive, businesses must be constantly improving their customer experience throughout the journey, from digital onboarding to physical onboarding.

Quicker traveler processing 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

Data protection regulations are rapidly becoming a global concern, with the number of countries enacting stringent regulations growing every month. Travel businesses need to comply with these regulations in order to trade worldwide, especially when dealing with the amount of personally identifying information (PII) collected in the course of capturing and verifying identity information.

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.