By Barley Laing, the UK Managing Director at Melissa.
Online retail sales are booming thanks to the pandemic and shoppers increasingly recognising the convenience of buying online. This is backed up by figures from the ONS that reveal ecommerce sales grew 46 per cent in 2020, compared with 2019. The fastest growth since 2008.
At the same time there’s increasing fraudulent activity taking place online. While ecommerce sales worldwide are set to grow from $4.9 trillion in 2021 to $6.5 trillion by 2023, it’s estimated that retailers operating online could lose almost $130 billion in revenue to fraud worldwide by 2023 according to Juniper Research.
Automate ID verification
Automation is the answer for those looking for the fastest, most accurate and cost-effective way to deliver ID verification online, and help reduce fraudulent activity. This means adopting electronic ID verification (eIDV). Such an approach will help to prevent fraud in real time at the point of customer access online, by ensuring retailers are dealing with the person they think they are. This automated service is something that also ensures good governance by aiding compliance with know your customer (KYC) regulations.
With eIDV when someone provides their contact and delivery details for a product on the payment page, cross-checks are made against the data they have provided in real time to ensure a smooth customer experience. This can be achieved with real time access to a dataset of billions of consumer records from reputable data streams, including government agency, credit agency and utility records.
In fact ensuring a seamless customer journey at the payment stage, driven by the automation embedded in eIDV, will help provide a standout experience. This is vital with so much similarity in the quality and price of products on offer online.
eIDV is not something for those only operating at the high value end of ecommerce to embrace, but all merchants - particularly with fraud on the up and the cost of integrating ID verification solutions into systems coming down.
In tandem with eIDV, it’s also important for retailers to use an automated address verification system (AVS). This is a service provided by major credit card processors and banks to enable merchants to authenticate ownership of a credit or debit card used by a customer. The credit card company or issuing bank automatically checks the billing address provided by the customer to the retailer against the billing address in its records, and reports back to the merchant. Using this information, in real time, the merchant can block purchases made by unauthorised users.
Automation better than manual
Bear in mind the automation of ID verification is far better than the physical, time consuming and more costly checks that, in lieu of automation, would need to take place behind the scenes. Also, with a manual approach you would need to employ staff with knowledge of thousands of ID document types and then there’s is the possibly of human error, making manual reviews less stringent than they should be.
Automate data quality processes to support ID verification
It's not just automated tools like eIDV that retailers should consider to prevent fraud, but simple data quality practices, which at their core stem from plain and simple contact data verification. A good place to start is with an automated address lookup or autocomplete service. These tools ensure only deliverable and verified addresses enter your system. They automatically reveal a suggested correct version of the address as the customer completes an online contact form, enabling them to select one that’s not only accurate but easily recognised, and correctly formatted for their country location. Another benefit of a lookup tool is that as well as preventing mistakes caused by fat finger syndrome, it reduces the number of keystrokes required when typing an address by up to 70 per cent. This speeds up checkout and reduces shopping cart abandonment, aiding the delivery of a standout customer experience.
Other areas of the data quality process that support ID verification include making sure email and phone numbers are live, callable and part of a genuine host, and even determining the common language in use for the given area code. There have been too many occasions where fraudsters have used fake phone numbers and emails to bypass verification procedures when signing up and purchasing online.
The speed, accuracy and cost benefits afforded by the automation of tools like eIDV, along with wider data quality practices, are vital to retailers as more move online and fraud continues to grow. Automation also ensures a positive customer experience, with no negative impact on the customer journey, therefore aiding all important standout for retailers in an increasingly competitive market.