Information, communication, and commerce are all simplified by the widespread availability of the internet. While this may seem like a good idea, it introduces new security and privacy risks. Identity verification is one approach to resolving these worries.
Businesses and websites use identity verification to ensure their customers are who they say they are. The legitimacy of online merchants is checked by using identity verification services. By verifying a customer’s identity, the service ensures their safety from imposters. Also, it prevents businesses from losing money to imposter customers.
What are Identity Verification Solutions?
Identity verification solutions are the process of ensuring that your customer’s identity is legitimate. The primary information you need to gather is their names, addresses, ages, and phone numbers. This information is necessary to gather as it will affect the operation of your business.
Online businesses need a reliable identity verification solution. This protects your customers and reduces the chance other people will commit fraud themselves. Businesses of all sizes need identity validation solutions, from sole proprietorships to Fortune 500 companies.
Why Identity Verification Solutions are Crucial for Online Transactions
As your company grows, so does your customer base, and one of the most important things you need to do is ensure that all your customers can trust you. One of the best ways to do this is by verifying their identity.
An identity verification solution is a process that ensures that all your customers are who they say they are and not someone else using their name or personal information. It’s important because it increases security for your business and customers.
People can be identified by their voluntary registration information. Names, addresses, phone numbers, and other details can be verified through database entries, national and international databases, etc. Individuals provide these details. Online services, such as shopping portals and payment gateways, can easily verify a user’s identity using these databases. Verifying identity is easy for these companies.
Online businesses are also protected from identity thieves. Getting unauthorized access to private data is possible without identity verification. Legal ramifications, reputational damage, and financial losses can result.
When you set up an online identity verification process, the customer expects the process to be smooth and quick. A quick, simple, easy-to-use verification system is essential for acquiring customers. If your customers have to fill out many questions to verify their identity online, they will turn to your competitors.
Method for Verifying Identity in Online Transactions
Online transactions can be made more secure with the help of several identity verification solutions. Below are some of the most popular methods of identity verification:
1. Credit-Based Authentication
Authentication based on credit-bureau data uses information from credit bureaus. Many companies store credit information, such as names, addresses, and social security numbers. By using a credit score, the user experience is not adversely affected. It may be challenging to match the credit records of young adults and newly arrived immigrants with thin credit histories.
2. Two-Factor Authentication (2FA)
Two-factor authentication (2FA) requires two forms of authentication to access an account or platform. This can include an email or text-based password and verification code. Two-factor Authentication (2FA) makes hacking your online accounts harder.
3. Knowledge-Based Authentication
A series of secret questions verify the user’s identity with knowledge-based authentication (KBA). Most people find these questions easy, but others find them difficult. “Do you have any children?” or “Who is your favorite celebrity?” are examples. KBA must answer questions within a specific timeframe. KBA’s main benefit is that it’s the easiest to understand. Among its biggest drawbacks are social networking and other social engineering methods.
4. Document Verification
Documents such as utility bills can also be used to verify customers. If your customer resides in the area, they can send you a picture of their last three months’ phone bill, electricity bill, internet bill, or bank statement.
Customers can upload pictures of their utility bills to your verification process. Proof of address capture verifies the person lives in a region you can do business in. Compliance with local due diligence can also be verified.
5. Biometric Verification
Biometrics can identify and verify people by their physical traits. Biometric verification uses fingerprints or facial recognition to verify an individual’s identity. These methods are convenient because they don’t require passwords or questions after the initial setup. This method is ideal for secure online financial transactions because it is difficult to fake.
6. Know Your Customer (KYC) Verification
Financial institutions and other businesses use “KYC verification” to verify client identities. Personal data is collected and verified using government-issued IDs. Identity verification can prevent money laundering and identity theft.
Industry Needs for Digital Identity Verification
1. Online Gaming
The internet simplifies collaboration and communication. E-gaming revenue is growing rapidly, making it vulnerable to illegal activity. Online gaming is everyone’s latest craze, including con artists.
There are around 1.61 billion people who play video games on the internet and are at risk. Exploiting youth for illegal activity or using the platform for money laundering and terrorist funding is accessible. Digital identity verification can deter criminals on online gaming platforms.
2. Alcohol
Any alcohol business requires age checks. Unrestricted access will increase public health risks for minors. Everyone is against underage drinking.
Nowadays, forged identity documents are commonly presented for age verification. Businesses in this industry can use age verification software to reduce the risk of minors consuming adult products.
3. Banking and Finances
Banking and related industries handle massive amounts of money. Customers trust banks, credit unions, and other financial institutions with their savings and assets. These institutions must protect those funds because they are hard-earned money from their clients.
Banking and insurance jobs require trustworthiness. Background screening services usually include identity verification, which can tell which online transactions are fake. Someone who lies may steal from the bank or other clients. Digital identity validation solutions can help banks and the finance industry prevent fraud.
Conclusion
Any online transaction requires identity verification. It prevents fraud, protects your privacy, and verifies your identity. Online companies seek the best identity verification solutions to build customer trust.
As identity verification technology improves, businesses seek better ways to verify customers’ identities. As more people shop online on multiple devices, this is critical. Due to the lack of security in recent years, e-commerce website fraud has increased significantly. Criminals use fake accounts to steal personal data.
Identity verification solutions are a crucial part of online transactions. They ensure that you can have confidence in the security of your information and that you are dealing with reputable customers.
Also read: Why Identity Verification Is Important in Cloud Marketing
