Despite significant improvements in online security, some quarters of the internet remain unsafe. The web – with its dark corners and bad actors – can never be a place that’s perfectly secure.
Identity verification is a core part of internet security, one that’s grown massively in recent years. It’s constantly being put to the test, especially in e-commerce and payments.
If I’m a business owner, how do I know that a buyer is, in fact, who they say they are? If I’m paying for an item, when can I ever be sure that the seller is genuine? When transacting online, being able to identify someone is a vital part of answering these questions.
A big problem that needs a balanced solution
A lack of security is slowing down the transaction process for all e-commerce and online payment users. Businesses are losing customers who don’t feel safe transacting online.
Whilst businesses understand the necessity for fighting online fraud and crime, they also know that putting steps in place to prevent attacks from malevolent actors creates friction and can potentially, lose them business. If you’re an e-commerce business owner, your priority is engagement and sales. Sure, you want your customers to be safe, but you can’t compromise their user experience (UX) with cumbersome identity verification and payment practises.
Hence, it’s a balancing act. Business owners know that they can’t compromise customer safety but, as per UX basics, you need to keep customers engaged to prevent them from getting frustrated, giving up and halting their purchase. Security must work hand-in-glove with design.
Fortunately, help is at hand - a swathe of revolutionary companies that are making identity verification an integrated part of user journeys. In time, this will keep customers engaged and drive growth across e-commerce and payment platforms.
Onfido finding a balance
A company at the heart of this transformation is Onfido, a London-based identity verification provider, who raised $50 million this year from, amongst others, Softbank and Salesforce. The funds will be used as growth capital to push the business in Europe and Asia.
Onfido gets their users to take a selfie (proof that posing in front of your own camera is both fun and useful!) and a picture of a passport or driving license. AI software compares the two and asks the user to carry out a liveness check by completing an action, like blinking or smiling. Onfido provides a report that indicates how likely the person is to be who they say they are.
The AI-led technology is being rolled out across 192 countries and the solution complies with a wide range of regulatory requirements for financial services, such as KYC and AML. Onfido claims its achieved a fraud exposure rate as low as 0.19%.
Onfido’s growth is based on the fact that their focus on security doesn’t compromise the workflow or design of a customer’s product. In fact, by employing cutting-edge technology, such as AI and the liveness test, their product is adding to the quality of a customer’s UX. By leaning on Onfido’s brand for security, smaller brands can leverage their power and quality.
And they’re not alone
Onfido’s success is heartening, but they're not the only ones keeping us safer online. Identity verification is booming and, according to a recent report, the digital identity and document verification services will be worth more than $15 billion by 2024. Onfido’s AI-focused platform is just one solution. Other future technologies, such as biometrics, optical character recognition, cryptography, and in some cases, blockchain, are making identity verification fast, straightforward and secure, and in no way compromising customer UX.
Northrow is another UK-based fintech who are using optical character recognition to verify identity and documents, seamlessly integrating their solution into their customer’s businesses. And Blockpass are using blockchain and smart contracts to solve for time-consuming KYC and AML compliance procedures whilst promising to reduce friction for users.
The trend is clear. Identity verification is vital to the future of the internet, but it’ll only be widely integrated if it reduces friction, rather than creating it. Future tech are making solutions scalable, hence the growth expected in the sector and the investments being made by venture capitalists.
The potential is enormous
As people grow ever more comfortable transacting online, a new wave of digital identity verification providers is doing all they can to keep pace with growing demand.
The e-commerce and payments market right now is vast but it looks set to explode as more companies expand their online presence. Further, as the popularity and security of blockchain and crypto assets grow, more and more people will carry out their financial affairs online. The market is only going to go one way and growth is the order of the day.
Central to this is integrated identity verification. Without it, the growth of the e-commerce, payments and digital asset universe will slow as customers retreat in the face of friction. We know this at Shieldpay. That’s why we always verify both parties’ identities in any transaction.
The keys to the future of the internet lie with online security providers. And identity verification platforms are at the heart of this movement.