Data breaches have been rampant these days, and many companies realize they need to enhance their customer verification process. Proper customer verifications help prevent young children from accessing products and services that are age sensitive. It also prevents fraudulent transactions from happening online.
Businesses have different options to address this issue to reduce the risk, costs, and liability because of fraud and underage purchases.
What is Customer Verification?
Customer verification is the process wherein the identity of the customer is authenticated. It comes in a lot of forms. This includes address verification, email verification, and phone verification. It also involves the other person confirming who they say they are.
One of the main reasons why customer verification is vital is to prevent fraud. It is crucial to verify customers in high-risk industries at risk for fraud, such as banking, finance, and retail.
Many companies realize they must work on their customer verification process in the wake of data breaches. It’s no longer enough that they check the customer’s name on a list of approved names during the time of purchase.
Types of Customer Verification
There are several customer verification methods that businesses use to verify their customers. Here are the different types of customer verification:
Multi-factor Authentication
This identifies the person’s identity by using two or more factors regarding the person. Usually, high-risk businesses utilize at least two factors to identify their customers. They would usually ask users to give their email and age, and they’d get a code as they try to log in to digital services.
Most customer verification apps only allow one method for customer verification. Doing so allows businesses to identify their customers efficiently.
- Age verification: This usually helps a business verify the customer’s age before they can buy a product online.
- Knowledge-based authentication: This verifies the person’s identity by allowing them to answer security questions. Usually, these questions are accessible for the user to answer but challenging for others to guess.
- Document verification: This verifies the authenticity of identity documents and includes one’s passport, driver’s license, and a government-issued identity card.
- One-time password: This is an automatically generated numeric or an alphanumeric series of characters that verify users for a past login session.
- Credit bureau-based authentication: This type of authentication usually relies on data from one or more credit bureaus. They may keep extensive credit information of their customers. This includes name, address, social security numbers, etc.
Ways to Use Customer Verification to Enhance Ecommerce Revenue
1. Prevent Payment Fraud
In retail, identity verification is critical in reducing the risk of payment fraud. Keep in mind that one of the main concerns of customers nowadays is security. They expect ecommerce sellers to protect their identity.
Credit card fraud is one of the most common types of payment fraud in the ecommerce industry. Usually, cybercriminals will make an online purchase from a stolen credit card, pretending to be a genuine user taking over the account of someone.
That’s why data management is vital. Moreover, with a reliable identity verification solution, you can easily verify the identity of your customers, ensuring that only legit people are on your platform.
2. Know Your Customers to Prevent False Declines
Know Your Customer (KYC) is verifying a shopper’s identity. This concept stemmed from online banking and insurance companies and is now used by ecommerce businesses to prevent online fraud.
It also helps boost your ecommerce conversions and promote loyalty to your brand. To identify customers on various channels and devices correctly, retailers avoid turning away customers and could even be in danger of compromising their reputation.
3. Prevent Chargebacks and Negative Reviews
Placing false orders on stolen credit cards or identity information is common. This forces businesses to incur penalties in banks and customers and even incur heavy fines for not using customer verification protocols.
In the same way, it can also lead to negative business reviews, damaging the reputation of prospective or existing customers since no one wants to purchase from a retailer with data security that’s vulnerable.
Investing in an excellent online ID authentication method helps you reduce fraudulent orders, preventing hefty fines and penalties.
4. Help Save Time for Customers
Many online shopping systems and a complex verification process enhance cart abandonment rates. For instance, a customer wants to purchase an item from your site.
They have to enter their name and email address and verify their identity by adding a photo of their passport. This takes up a lot of their time and is not acceptable.
With quick, AI-powered identity verification software, your customers can authenticate themselves once, reducing the need to enter their personal information every single time they want to shop on your site in the future.
It saves customers time, making their shopping experience a pleasant journey. Additionally, satisfied customers will also become loyal clients in the long run. That’s why every detail on your site matters.
5. Enhance Your Customer’s Experience
Companies increasingly use digital workflow to enhance a seamless onboarding experience for their customers. By eliminating paperwork, this process allows users to instantly access and get started with the product or service provided by online retailers with minimal wait times.
The identity verification steps of most online retailers are as follows:
Collecting the ID documents of customers and verifying whether or not the documents are authentic.
Aside from customer authentication, a report is also generated for auditing. An identity verification process digitally makes the entire process seamless.
6. Recognize Repeat and VIP Customers
Because of lead verification, leads with specific attributes and a history of engagement with an ecommerce brand can be given personalized offers, boosting the size of the deal and conversion rate.
This process usually involves recognizing repeat and VIP customers from calls, emails, direct marketing, and social media since people rarely use the same identity. Usually, recognizing a customer or lead and then being able to complete the identity often goes a long way in driving conversions.
Complete and accurate attributes and identity on different inbound channels allow marketers to find existing and prospective customers. This aspect is usually vital to your ROI.
7. Reduce Shopping Cart Abandonment
Do you know that shopping cart abandonment often exceeds 80 percent for online transactions? One of the main reasons for this is the increased time for verification. Online checkout procedures can be long. There’s a higher chance of the customer leaving the purchase process without completing it.
Fortunately, getting a digital ID verification service hastens this process. Using smart software solutions gives you authentication methods based on artificial intelligence, verifying the customer’s identity within seconds.
It also allows businesses to authenticate customers without delays that may hurt purchase abandonment. By using a quick authentication method, you can boost the efficiency of your checkout procedures.
Over to You
So, there you have it. All in all, there are a lot of ways that ecommerce retailers can enhance the customer verification process. One way is tailoring your business to get the most significant return on investment based on your specific needs.
In this increasingly digital world, identity fraud is a significant problem, so a good customer verification solution plays a crucial role in protecting online commerce.
