Address verification verifies a customer’s address before any transaction. It makes it easier for businesses to onboard legitimate customers and complete business procedures in a secure manner. In reality, it safeguards companies against fraud. So, before we get into how crucial an address verification service is, let’s take a look at the process of verifying an address.
The company requires a selfie of the person having their identity document to verify their address. After that, the face is compared to the photograph on their document. The user is also required to deliver secondary documents that contain information about their home or company address and are matched with a government-issued identity card. The user is either labeled an authentic individual or a risk to the organization based on the results.
Sectors that Require to Verify Address
Fraudsters’ techniques for abusing individuals and businesses have altered as technology has advanced. As a result, the regulatory authority has mandated all companies to address verification before digital onboarding. The following are some of the industries that must use an online address verification system:
- E-Commerce Sector
Each year, e-commerce firms suffer the loss of millions of dollars due to returned shipments or chargebacks. Fake addresses are being utilized for this reason. This necessitates a solution that can verify address to ensure that items are delivered to the correct place and to the right client. As a result, address verification confirms if the client’s address is genuine or not. It also adds another degree of security to the fight against fraud.
- Financial Firms
It has become really easy for the imposters to steal identities, create fake accounts, and fulfill their malicious intents. First, they create a phony account, and then they utilize it to launder money. If the financial firms want to reduce credit card fraud and many other scams, they must deploy address verification services. These solutions validate an individual during onboarding or any time when needed to keep the firm from sophisticated fraudulent activities.
- Rental Services
Sharing economies have become really common these days as evident from Shufti Pro news. The rental sector requires to deploy address verification in order to validate address of the customer to ensure their legitimacy. Having such verification services would make them stay compliant with the regulations, prevent them from hefty fines, and builds their credibility in the competitive market.
Benefits of Address Verification System
Fraudsters are exploiting businesses through their sophisticated methodologies. What they do is that they buy any item, use it for a few months, and claim a chargeback from the company saying that they didn’t make any purchase. For a chargeback of just one dollar, companies lose 2.40 dollars. So, it is quite clear how badly chargebacks impact any company. This is where verifying address proves to be fruitful. It protects the company, no matter it is an e-commerce or a healthcare platform, from fraudulent activities. Many businesses are now accepting global investments like Shufti Pro funding, lately done by Updata partners.
Better Customer Experience
All the companies are struggling hard to satisfy their clients and make their mark in the competitive market. Address verification again is a great choice to fulfill companies this objective. Verification of address helps businesses to maintain their records and deliver goods to their original destination. When a customer gets all their shipments within the set time frame, they talk about the company in positive words. As a result, the company grows and generates greater revenue.
Reduction in Returned Shipments
Returned shipments cost any company a huge sum of money. It is documented that 30% of all items purchased are returned to the firm. However, with an address verification service, the company can confirm the address and deliver the items to its true customers, preventing the possibility of returned shipments.
Better Regulatory Compliance
Regulatory bodies such as FATF have made identity verification which includes age, address verification, etc. a mandatory thing for companies. This means if they will not follow the regulations they have to pay hefty fines and penalties. Thus, address verification is really important for better regulatory compliance.
Fraudulent activities are rising. It has become really important for e-commerce, banks, and other industries to verify the address of the customer before dispatching any product or opening up their account respectively. Address verification not only tackles fraudulent activities but also prevents the firm from hefty non-compliance fines. Moreover, it provides the user with an enhanced experience, builds the company’s credibility, and helps it earn great profit in this competitive digital world.