5 benefits of KYC verification for E-commerce Industry

E-commerce businesses have been booming over the years with Amazon alone turning profits into billions, making its founder and current CEO, Jeff Bezos, one of the wealthiest man on earth. Ali Baba is next in line with total sales in excess of USD 40 billion annually. But all is not rosy for e-commerce industry as it is plagued with various technical and customer issues of its own. One of the most frequent ones is cashback requests and the other one is something that online marketplace encounters frequently: complaints about identity thefts.

Over the years, official authorities and large platforms like Amazon has put their weight behind the plight of customers, which means that retailers have to bear the burden of frequent cashback returns. There are miscellaneous problems of their own for retailers and websites running their individual e-commerce business. Online scams and fraudulent user activity is at the top of them. It is easier to make online purchases using fake or stolen credit cards. KYC verification is a reliable source to cut down on these cost overheads for the e-commerce industry. There are various categories of KYC verification that can be used to not only reduce frequent cash back request but to also ensure that cases of identity thefts can be handled much more effectively. Some of these verification services include:

• Facial Verification
• Credit Card Verification
• Debit Card Verification
• Identity Document Verification
• Biometric Consent Verification
• Address Verification
• Phone Verification

There are several KYC verification software available in the market that either offers some of the above state services or in some cases, all of the above services to its users. Integrating such a bespoke verification system into an e-commerce platform can have the following benefits:

Verified Users

An e-commerce platform that asks its potential users to perform KYC verification before they open an account will be able to avoid several issues:

• No duplicate accounts
• No fake reviews from duplicate accounts
• Reliable customer base with original identities
• Better service standards
• Genuine transactions ensured

What kind of services should be used to perform a KYC verification is something that depends entirely on the management of e-commerce website and the kind of products that they are selling. They can opt for Document verification and Facial verification at the time of registration to ensure that a real person with valid identity document is signing up on their e-commerce website.

Avoid Cashback requests

Most of the cashback requests originate because customers claim that they have not received their ordered item. Address verification can be performed with the help of KYC software by using an identity document or some other proof of address such as utility bills or bank statements. This can substantially reduce such requests.

Biometric consent verification can also be utilized to ensure that a verified user is ACTUALLY placing an order for a product. They can show a written consent or show the name of their ordered item on a page, in front of their webcam. Such an image can be used as proof of consent in case of a customer claim that they have not placed an order or that the item they have received is not that they have originally ordered.

Source for 2-way communications

Phone verification can also be performed at the time of registration by an e-commerce website, in addition, to address verification and document verification. This will provide an e-commerce business with a verified medium to communicate with their users. Customer service can use these phone numbers to gauge the satisfaction level of a user after an item is delivered to the customer.

New offers or an upcoming event can be effortlessly marketed to registered users even if they have not logged into your website. Found out that a particular not used your e-commerce website for a long time? Send them a Welcome Back offer with prices of certain items reduced only for them. Opportunities are unlimited when you opt to perform Phone verification at the time of customer registration.

Concrete User Data

Customer information collected after KYC verification gives a reliable big data to an e-commerce platform. They can easily measure that how well their products are being sold in a particular demographic. Which kind of age group is interested in what kind of product categories? What kind of product lines should be introduced to attract users from untapped sections of society? Which category of users is signing out without making a checkout? To cut a long story short, the analytics of an e-commerce business become much more actionable and reliable when KYC verification are integrated into its website.

No More Online frauds

Last but not the least, KYC verification helps e-commerce businesses to fight against the menace of online frauds. Users with fake identity documents or stolen credit cards can be easily identified and stopped from registering on to an e-commerce website. Modern day technologies like Artificial Intelligence and OCR based data extraction techniques ensure that not a single person with forged identity documents or credit cards is brought onboard. Holograms are thoroughly vetted, security features of provided documents are comprehensively checked.

Now that the benefits of KYC verification have been listed for e-commerce industry, it is time that some of the concerns of e-commerce industry are also concerned regarding KYC.

KYC systems are slow – Yes, there was a time when a KYC verification used to take several minutes, if not hours, but gone are those days. There are several KYC operators that provide real-time results to their users.

KYC system are not secure – Again, modern-day KYC verification software has made it mandatory to focus on data security to ensure that not a single line of customer information is stolen or hacked.

KYC effects user experience – Easily integratable KYC verification services are available nowadays that completes the entire KYC cycle within 1-2 screens to make the process hassle-free for end-users.

KYC verification technology has come a long way and it is high time that the e-commerce industry incorporated such KYC verification software into its business processes to create a much more customer friendly experience for buyers and users.

About Writer:

Amelia is a senior content marketing associate at Shufti Pro, Amelia has been involved in digital marketing of this AI-based identity verification product. Amelia believes that it is imperative that online businesses start adopting KYC & AML practices to avoid financial risks and build trust with their online customers. She has written on diverse topics ranging from Fintech to IT Support services and from big data to agile technologies for businesses.