In today’s digital world, everybody has access to advanced technology. Unfortunately, fraudsters have access as well. They are also using advanced technology in fulfilling their malicious intentions. The significant increase in criminal activities has led organisations to develop more robust identity verification solutions to make sure their customers are legitimate. One of the parameters in identity verification is the address verification system. Let’s take a look at the important aspects of address verification system.
Why Is Address Verification Important?
Address verification has several benefits for all the sectors that employ it. Let’s take a look at some of the most important benefits that might interest you:
Prevent Fraud
Chargebacks, friendly fraud, and numerous other kinds of frauds have been an issue for businesses for a long time. Every chargeback fraud costs the merchant a loss of $2.40 according to Chargebacks911, and in every two years, the chargebacks increase by 41%. Reducing frauds and preventing fraudsters from causing any troubles for the company and its customers.
Better Compliance with the Laws
FATF’s 40 recommendations have made it compulsory for all the companies to perform robust identity verification checks. For the e-commerce sector, it is important that they verify identities of every customer. With the help of address verification service, they can verify addresses of individuals, organisations can comply with the regulations along with onboarding legitimate customers only.
Enhanced Customer Experience
Giving customers the best experience of their lives is the ultimate goal of every business. E-Commerce platforms and other industries can use address verification and maintain an updated record of all the customers. This will help them in making faster deliveries to the right place and get in touch with the clients regularly. Getting feedback and improving services will ultimately lead to enhanced customer experience.
Reduction in Returned Shipments
The CNBC reports revealed that total online shipments will cost $123.9 billion and unfortunately, 30% of them will be returned. This will increase the cost for merchants. However, verifying addresses can businesses ship products to the right place and reduce the chances of returning shipments.
Process of Address Verification
The process of address verification is comprehensive yet time-efficient and takes only three steps for completion. Take a look at the steps:
- First, the customer has to register on the company’s website for the verification. For instance, a purchase has been made and the company gets details of the client. The next step is ensuring the legitimacy of the address. The
- Second, proof of address (POA) is required as additional proof of identity and address.
- Lastly, once the verification is done, the results are shared with the customers.
Documents that are Reliable for Address Verification
Not every ID document is reliable for verifying addresses of the customers. Certain document types and formats are mandatory for address verification systems. Here are some of the reliable documents for verifying addresses.
- Employment letter
- Utility bill
- Bank statement
- Passport
- ID card
- Driving license
Some address verification service providers accept other documents for verifying addresses. However, the aforementioned types are the most reliable sources. These documents serve as proof of address and they must be up to date as well. Address verification software checks for authenticity of the documents and these must not be expired. Otherwise, the verification declines.
Industries that Need Address Verification Service
Almost every sector needs address verification service to ensure higher levels of efficiency. Nevertheless, the following few industries must verify addresses at all costs.
- E-Commerce sector
- Finance industry
- Fintech sector
The highest number of frauds and scams are recorded in these sectors every year. Not only compliance is achieved, but fighting fraud will get easier as well.
Conclusion
Address verification is an important parameter in identity verification and anti-money laundering screening. It ensures the legitimacy of the customer and helps businesses in maintaining healthy relationships with the customers. With the help of an address verification system, you make sure fraudsters stay away from your business. Preventing frauds like chargebacks gets a lot easier with address authentication service. Moreover, enterprises can save a lot of cost that is incurred due to returned shipments. They can enhance customer experience and lastly, companies can comply with FATF recommendations in a better way.
