The volume of online interactions between businesses and consumers is constantly increasing. As digital commerce becomes increasingly more widespread, the demand for technological solutions to deal with the problem of identity verification and how to create trust also rises.


Fraud losses are growing. In the last 12 months, 63% of businesses have experienced either the same amount or an increase in online fraud. This growth intensifies the need for quick and easy verification processes.


The need for solutions that have little impact on the customer experience is great. 75% of businesses, surveyed by Experian in 2018, expressed a keen interest in acquiring greater security measures and implementing most secure authentication processes.


How equipped is your business at authenticating customers identities online?

What investments are you making to manage your risk of fraud in compliance with KYC and similar regulations?

If you are among the three-quarters of businesses who recognise their need to improve in this area, then the following fraud prevention and KYC tips should help to make you aware of some of the key areas that you need to address.


1.  Ensure payment methods are secure.


Whether your business accepts PayPal, credit cards or both, you need to be aware of any relevant policies that could potentially impact your business.

It’s great business sense to familiarise yourself with and apply the security measures recommended by your payment service providers. Doing this can be hugely beneficial in terms of preventing fraud and tightening up security.


2. Protect yourself against chargebacks.


Chargebacks are a major issue for online businesses. Chargebacks are usually associated with consumer fraud as opposed to identity fraud. They occur when a customer contacts their bank or financial institution to claim that a payment has not been properly authorised.

Different credit cards (and PayPal) have different policies for dealing with chargebacks so it’s a good idea to look these up if you want to avoid being out of pocket.

In terms of preventing and winning cases for chargebacks, ensure that you always have tracking. If your online business deals in physical products, tracking allows you to prove delivery and receipt of goods.

If you have a SAAS company, make sure that you have systems in place that allow you to track if and when your customers access your service to avoid financial loss caused by chargebacks.



3. Use these common KYC tests to fight fraud.


Here is a list of common tactics you can use on a daily basis to combat identity fraud.


  • Validating email addresses.
  • Validating telephone numbers (by sending a pin via SMS).
  • Check public records when dealing with businesses or individuals (to verify an address for example).
  • Validate any document with the issuing bodies.
  • Ask questions that only the customer or business you’re dealing with is able to answer.
  • Look into doing the whole KYC procedure on video – also know as doing a  video identification.

These KYC tests are all very simple and easy to implement but they are all effective ways of preventing identity fraud.


4. Use a 3-D secure system.


This is a protocol that was introduced and adopted by most major credit card companies in 2010. It’s an extremely secure system that’s designed to authenticate at three different levels.

A 3-D secure system verifies information on the bank and the business (if applicable) of the sender, as well as information on the bank (and business) of the receiver. 3-D secure systems also authenticate in what’s referred to as the interoperability domain.

This means that, as an extra security measure, any information exchanged via the intermediary companies that financial institutions use to process transactions is also used for the purpose of verification.


5. Use AVS response codes.


AVS stands for address verification service. AVS codes can be used to confirm a user or customer’s address information. This is done by cross-referencing the address you’ve been given with the address that the credit card company or bank has on their file. It is a well-known security and fraud prevention method and can be a useful tool to help you decide whether to accept or decline a transaction.


6. Use a third party software provider to verify identities.


Many SAAS companies have responded to the huge demand for increased digital security measures. Outsourcing your authentication process to a third party can be an affordable and easy solution.

Security expectations and requirements vary greatly from business to business. As does the level of risk. If you want to decrease the likelihood of your company being targeted while also complying with current regulations, there are a number of ways in which this can be achieved.

Some companies offer manual services, others use AI software programmes. Real-time identity verification processes are also becoming increasingly popular with a lot of businesses.


This is also what we offer at Fully-Verified. Our process requires the customer to verify their identity in real time, via a video call backed by automated document recognition and face recognition.

This process is extremely secure, and research suggests that customers (particularly millennials) are more than happy to do this when making larger purchases, or certain types of purchase (like buying cryptocurrencies for instance) where they feel that extra security is warranted.


7. Reassure your customers (and show potential fraudsters) that your website is secure.


Statistics have shown that websites with a lack of visible security are a huge turn off for customers. Awareness of identity theft is growing and people want to see that you are taking measures to keep their information safe.

There are a number of ways you can reassure customers, you could have something visual on the site such as a logo or video for example, or you could get the message across via your web copy.

Lack of visible security is a green light for fraudsters. The same measures put in place to reassure the customer, ideally, should also discourage potential fraudsters from targeting your business.

Getting this right can be tricky. You need to provide enough security for users to feel safe but not so much that it increases abandonment figures (i.e customers quitting the onboarding process because there are too many hoops to jump through).

It’s a balancing act between customer experience and convenience on the one hand, and fraud prevention and compliance with regulations on the other.

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Fully-Verified was created as answer to its founders collectively losing over $150 000 to various types of fraud in their eCommerce businesses.