As e-commerce booms, so does online identity fraud.
In 2019, identity theft happened to one in every 15 people. Fraud of this type affects both customer and business, so it is particularly important for the retail organization to keep fraudsters from creating accounts, essentially stopping them at the front door of their online store.
Identity verification in real time is crucial, keeping transactions safe and only allowing correct, clean data to filter into overall business operations. On this landscape, phone verification is proving a simple and convenient option, strongly aligned to the concept of mobile e-commerce. Identity verification can be performed at customer registration as well as during the checkout process.
Say hello to phone verification
Why not simply use an email address to verify a person’s identity? While this is a strong piece of data that can be matched to an identity, think about how many email addresses have you had over the years.
Perhaps more importantly, have you deleted the ones you no longer use or are they simply lying dormant? These scenarios make them not only less valuable as a critical identifier, but also more vulnerable to hacking, spoofing, or other types of misuse.
In contrast, how many phone numbers have you had? Phones numbers are a good central identifier because they are sticky. People move, change jobs, and get new emails, but they tend to keep their personal mobile device number for years. Maintaining (or ignoring) an old email address is free, but keeping phone numbers active has a financial cost attached. As a result, it is unlikely that individuals hold a slate of inactive phone numbers.
Don’t get taken by fake email addresses
Opening an email account is generally free and simple. It’s also easy to make a fake email account look real, where anyone can operate it as long as they know the password. But if someone wants a new mobile phone number, they must provide documentary evidence to confirm their identity.
This more in-depth due diligence process makes it more difficult for fraudsters to obtain a new SIM card. When a mobile phone is lost or stolen, the owner typically lodges a report and blocks the number. Getting locked out of an old email address may not get so much prompt handling and attention.
Keep it friction-free
Overall, SMS campaigns have an average conversion rate of 45% Conversion rates increase by 112.6% when an individual is sent a text message after initial contact. Similarly, customers are more likely to respond to a phone call or an SMS than to an email regarding processes such as order confirmation or delivery. This familiarity adds value to the identity verification process in real time as well – even for those among us with simple, non-Internet enabled mobile devices.
For retailers, simplicity and scalability matter – any identity verification solution must be seamless to the shopping experience. Now consider that mobile devices are already in the hands of nearly 70% of the worldwide population and 93% of 18-to-24-year-olds. And the number of smartphones is expected to grow to nearly 3.8 billion by the end of this year.
Mobile e-commerce is growing in step, making up 38% of the overall e-commerce market in the U.S. Clearly, many people consider their phones an extension of themselves, always on hand. Because customers have such strong ties to their mobile devices, phone verification is an optimal way to prevent fraud and keep an accurate and up-to-date customer database.
Greg Brown is VP of Melissa, a provider of global contact data quality and identity verification solutions that span the entire data quality lifecycle and integrate into CRM, e-commerce, master data management and big data platforms.