It is compulsory for e-commerce platforms to meet the regulations so they can combat scams. They need to verify the identity of the sellers before onboarding. Effective identity verification ensures a legitimate business and enhances buyers’ platform trust. Online know-your-customer (KYC) helps e-commerce platforms eliminate fake products, fraud, and illegal activities.
Internet shopping platforms are proliferating daily. They have been growing since the pandemic, according to Statista, retail online businesses sale amounted to $5.2 trillion worldwide in 2021. This industry is projected to grow by 56% and gather about $8.1 trillion by 2026. The advancement in technology also enhances the growth of scams. It multiplies financial fraud and money laundering through internet purchases. Identity theft is one of the leading types of fraud, which affects customers and merchants. Due to these scams, e-commerce platforms face huge losses annually. This article briefly explains how client verification is essential and why online KYC is a game changer for e-commerce platforms.
The Crucial Role of Online KYC Verification
On E-commerce platforms, businesses sell their services, products, and other goods on these platforms. There are various types of industries operating, such as business-to-business (B2B), business-to-consumer (B2C) and consumers-to-consumers (C2C). It eliminates physical stores and enhances customers’ shopping experience by delivering products to their doors.
But it opens a new door for scammers to reap the data. Money launderers also use these platforms to clean the black cash. E-commerce platforms deal in online money transactions, vulnerable to money laundering, fraud, and other financial crimes. That’s why among other financial institutes, e-commerce must also comply with anti-money laundering (AML) regulations. It also accelerates the compliance process with AML and other financial sector regulations.
Trustful Online KYC Solution for E-commerce Platforms
Online retailers have to combat various frauds. Scammers use fake IDs to buy products from stolen credit cards or bank accounts. Criminals pilfer customers’ data from multiple websites, gaining access to sensitive data such as name, address, contact number, and date of birth. This information is enough to break the security of banks and use credit cards for online payments. Scammers use these strangers’ accounts to disguise their identities during illicit activities. Online KYC check is ideal for divulging the fraudster’s identity and promptly onboarding legit customers. Given below are the benefits of online KYC verification:
Seamless Merchant Identity Verification
According to a Worldpay study, identity theft is the most common e-commerce scam. It causes 71% of various threats among merchants and platform owners. Online KYC solution authenticates customers’ identities by verifying their documents, such as driver’s licenses, national IDs, or passports. It also gathers customers’ personal information before onboarding them, including name, date of birth, contact, and address. KYC online is an ideal e-commerce solution to onboard merchants.
Onboard Customers Confidentially
Verify the onboarding customer by standard security protocols, such as Secure Sockets Layer (SSL) and Digital Subscriber Line (DSL), is no longer sufficient. To curb identity fraud, e-commerce needs to use effective online KYC platforms. It will help them to cope with this challenging task promptly. Most customers use fake addresses and contact during online shopping, and counterfeit addresses in cash on delivery lead companies to significant revenue losses. By verifying customers’ original IDs and addresses, e-commerce platforms can boost their revenue.
Enhance Company Reputation
Trust is the key to every successful business. They boost their image and create brand loyalty to retain customers. In online businesses, there are various competitors, therefore, a single mistake can destroy the reputation and increase the bounce rate. Online KYC enhances customer trust, it shows them the company has worked hard on the onboarding process, and merchants are legitimate. These bolster securities influence customers to buy products without hesitation, boosting the business’s revenue and reputation. AI-based KYC online ensures customer data is kept secure in the databases. It protects sensitive data, so customers feel safe buying products and services.
Improve Customer Experience
E-commerce platforms can enhance customer onboarding experience with the latest machine learning technology. It eliminates the need for physical paperwork by offering businesses to onboard clients remotely. Online KYC checks customer identity using machine learning tools, providing business owners accurate results. Buyers can onboard on the website in minimal time and access online retailers’ products or services.
Protect From Financial Fraud & Fines
The worldwide proliferation of the e-commerce industry has spurred the rise of online fraudsters. Online retailers become easy victims of identity theft scammers they use fake information to open an account. The merchants open an account on the website and ship the counterfeit products to the buyers. Online KYC automates the process, protecting financial institutes from fraud and money laundering. Moreover, all financial institutes, including e-commerce platforms, must meet rigid regulations from authorities. These laws ensure the company works according to obligations and create a safe and secure environment. It protects e-commerce businesses from encountering various fines.
Bottom-line on the Online KYC Software
KYC is essential for all financial industries to comply with rigorous regulations. Compliance with these obligations ensures businesses are protected from fraud and fines. Online retailers can verify the customers before onboarding them, it ensures they are who they claim to be. It safeguards e-commerce platforms from cyber scams and improves the company’s reputation.