Economic instability, geopolitical turbulence, emerging financial crimes, and identity theft have left customers with security concerns. While engaging with digital payment providers, people demand securer gateways. Furthermore, data breaches, account takeovers, and sanctions involvement are other concerns. Criminals are exploiting every loophole within the financial systems. They later leave customers with a loss of millions and drive reputational damage for payment providers.
In 93% of the cases, businesses are attacked by external cybercriminals who exploit networks’ parameters and easily access crucial information. Hence, payment providers are bringing in efficient IDV mechanisms to address fraud concerns. Furthermore, customers see digital ID checks as an added value to their security.
This blog further enlightens how identity verification services enable payment service providers to meet customers’ demands.
Identity Verification Services – Identifying Prevalent Fraud Schemes
The payment industry is embracing digitisation and providing customers with faster online transactions. While customers demand convenience and a smooth banking experience, they also expect more security. Payments vulnerability has taken manifolds. With emerging synthetic identity theft, users are less likely to vest their trust in service providers that involve fraud.
Account takeover, insecure gateways, phishing attacks, and social engineering scams further force customers to give online payments a second thought. Criminals never stop to exploit monetary services, irrespective of the identity verification measures taken by financial institutions. They deploy the following strategies to perform illicit actions.
Wire Transfer Fraud
The movement of funds through wire transfers has become less popular compared to their reign in the 1970s. Recently, FinTech services are taking over as the burgesses of the finance market. However, criminals still use wire transfers to hide illicit transactions. With the advantage of immediate settlement, it becomes challenging to revert transactions after detecting suspiciousness. Furthermore, counterfeit profiles further make authentication of ID difficult.
Business Card Scams
Payment service providers that issue credit/debit cards to their long-associated customers should be cautious against fraud. Criminals massively target people indulged in online transactions. They easily obtain business card details through phishing attempts – impersonating banking officials. As a result, criminals easily bypass digital ID checks.
Bill scams is another common scheme that massively affects small businesses. However, they have not spared established enterprises while deploying advanced forgery techniques, bypass fraud detection controls. Criminals create counterfeit invoices that resemble the actual bills sent by vendors. They use false information to breach identity verification and leave with malicious payments without being questioned.
Payment service providers need to ramp up their game against fraudsters deploying invoice forgery schemes. They should perform adequate validation of identity to ensure the bills are coming from legitimate vendors, customers, or other affiliates.
Safeguarding Payment Service Providers with Online Global ID Verification Solutions
Payment service providers strive to provide a secure and convenient customer experience. However, they face a huge challenge in balancing these two. Therefore, payment providers are making efforts to upgrade their identity verification processes and prevent fraudsters from accessing their services. Customers no longer see IDV processes as inconvenient and friction during processing transactions is less likely to bother them. Moreover, they consider ID verification as reassuring evidence that payment service providers have enough security intact.
Digital payment service providers are investing more in integrating AI-powered digital identity verification for finance mechanisms. These advanced IDV solutions automate customer onboarding while leveraging various checks such as real-time selfie-based authentication and liveness detection. In both ways, payment service providers can ensure the user is present when initiating a money transfer.
Understanding Agility and Resilience in Authentication of ID
Digital payment companies that understand agility and resilience within the changing online global ID verification landscape better cope with emerging threats, shifting market pace, and customer expectations. Similarly, they can identify sophisticated fraud techniques while placing necessary precautions to prevent them. Not only this, payment service providers can deal with increasing regulatory pressure that comes with tougher digital ID check obligations. They can further reap the following benefits:
- Increase client conversion rate by offering more secure services
- Protect crucial information from external cyber security breaches
- Keep up with changing regulatory requirements
- Offer personalised and customer expectation-aligned services
- Maintain trust, reduce friction, and reap accuracy
The online payment sector is innovating its operations to meet shifting consumer expectations with a positive impact and strengthened transaction systems. Furthermore, by investing in digital ID checks, service providers are building consumer trust by investing in digital ID checks. By integrating AI-powered validation of identity, online payment-providing companies can not only offer risk-free assistance to affiliates such as marketplaces, grocers, retailers, and others but also facilitate customers more proactively. Ultimately, ID verification solutions directly enhance business performance.
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