The world began defining e-commerce as the process of buying products and services via the internet in the year 2000. During that time, numerous companies in the U.S and Western Europe had started offering their services through online platforms. eBay and Amazon were among the first digital companies to permit electronic transactions for buying products online. Thanks to the advent of these companies, we now have a robust e-commerce sector with renowned names like Amazon, eBay, Home Depot, and Alibaba. Although revenues in this sector are forecasted to grow to USD 6.54 trillion by 2022, it does not imply the sector will be immune to challenges along the way. From facing intense competition to avoiding identity theft, there are many challenges in store for the e-commerce sector.
One way of overcoming these hurdles is to adopt efficient identity verification procedures without pushing away customers by opting for complex methods. Until recently, customer identity verification was a tedious task as it required the submission of additional documentation from the customer’s end. However, with advanced identity verification technology, the e-commerce landscape is changing, making online identity verification easier than ever.
Here are 5 reasons why you should be considering identity verification solutions for your e-commerce website.
1. Online Fraud is Ascending
With the advancement of the digital world, CNP (Card Not Present) frauds are on the rise. CNP fraud refers to a type of credit card scam that occurs over the phone or online, in which the customer fails to physically present their card to the merchant while carrying out a fraudulent transaction. For this reason, online merchants need to stay vigilant when accepting payments over online platforms. If online stores fail to keep up with digital fraud prevention measures like automated identity verification procedures, retailers are expected to lose approximately USD 130 billion in revenue due to fraudulent CNP transactions.
2. Reduce Shipping Errors
Online identification and verification services have the ability to make shipping operations more efficient, reliable, and accurate. By authenticating a customer’s shipping address, the probability of unnecessary delays and order delivery at the incorrect location is lowered. Identity verification ensures that customers receive the correct orders at the right address while reducing refund shipping costs and the time spent on customer support inquiries.
3. Ease and Convenience of Ordering Online
One of the key challenges that e-commerce site owners have to bypass is the act of shopping cart abandonment. This process involves moving a customer through the sales funnel by offering products that pique their interest, only to lose them at the point of purchase. The leading motivation behind shopping cart abandonment is the complexity of online shopping cart systems. If adding products to the cart is a complicated part of your website, there is a high chance that customers are facing the inconvenience of adding their information multiple times, which increases the likelihood of them giving up or submitting incorrect information.
By utilizing identity verification technology, e-commerce business owners can provide their customers an opportunity of scanning their personal information directly into the system, paving the way for more accurate transactions. This increases sales reduce the shopping cart abandonment rate and save the customer time.
4. Safer Mobile Transaction
Before explaining why customer identity verification is necessary for mobile commerce (m-commerce) transactions, take a look at the following statistics:
- The total number of mobile users are currently 5.22 billion, and the number is expected to grow
- The United States, India, and China have the highest number of users
- Mobile commerce sales are projected to reach $3.56 trillion in 2021
With the growing number of smartphone and tablet users, it is vital to identify and protect customers while they make purchases online. By installing an identity verification tool, customer data can be collected through an automated system that eliminates unnecessary typing for m-commerce customers, while simultaneously identifying the buyer with accuracy. This ensures safe mobile transactions.
Key Takeaways
- Automated identity verification technology is making online customer verification easier than ever
- Advanced identity verification procedures help to counter fraud and reduce chances of packages being delivered to the wrong address
- For accurate and safe transactions, e-commerce owners use identity verification to provide their customers an opportunity of scanning their personal information directly into the system
- M-commerce is expected to continue escalating in the years to come, making identity verification crucial for ensuring customer safety on digital platforms
