Selling high value products online? ID Authentication can protect your business

As our world continues to shift further into the realm of the internet, so do our buying habits. A 2020 study conducted by LexisNexis showed that there has been a significant increase in online shopping, a trend that has been increasing for quite some time and was accelerated even faster in the wake of COVID-19. Retailers have had to face the reality of shifting their businesses online. For some, this meant shifting expensive goods to online channels. Auto-dealerships and jewelers are two good examples of this trend, although by no means the only high-end retailers who have done so.

It has become increasing crucial for businesses to protect themselves and their customers when selling high value products online. The fraud risks associated with selling online are always worrisome, but they hold even greater weight considering the size of any given potential loss that could result from such large transactions. Not only do such transactions expose the retailer to potential fraud losses, but there is also the risk of failing to comply with federal regulations that may be triggered by sales of goods exceeding $10,000.

The Importance of “Know-Your-Customer”

Knowing that the person making the transaction is who they claim to be can put both your business and customers at ease. By taking the extra step of verifying the identity of your customer, a business can help ensure they are doing their due diligence to meet regulations as well as help prevent a fraudulent transaction from occurring. In a regular brick-n ‘mortar store, this verification process can be done in person. Store associates can accept identification documents directly from the customer and authenticate them using desktop solutions designed for this purpose.

However, for an online or mobile transaction, this in-person process is not available.

The risk of identity fraud has been shown to be HIGHER for online or remote transactions. Fraudsters can more easily fake identities during transactions in which the customer is not physically present in the store. Increasingly common over recent years has been the use of   Identities to commit online retail fraud. In addition, partially remote transactions, such as “Buy Now, Pick-Up In Store”, have also shown a higher fraud risk, according to the LexisNexis study. These trends all contribute to making it increasingly difficult to safely run a business without taking the crucial step of identifying the person making the purchase.

How PALIDIN WebID can help you ID remotely

PALIDIN WebID is a cloud-based software that can be used to authenticate the identities of remote customers. When a transaction is being conducted, PALIDIN can send a prompt to your customer’s cell phone. Your customer then will be instructed to photograph their ID-document as well as to take a “selfie” image. The ID will be run through a global database of identity documents to forensically authenticate that the ID document is genuine. During the “selfie” stage, PALIDIN will also do a check for “liveness” to make sure it is in fact a person taking a photo of themselves in real-time. The image from the ID is than compared to the image of the person in the “selfie” to ensure that they match. Your business now has the peace of mind of knowing you have successfully verified the identity of the person making the transaction. Likewise, the person making the transaction has the peace of mind knowing your company takes this extra step of protecting the identity of consumers.

For larger transactions that trigger federal reporting requirements, PALIDIN can keep an encrypted report of all verified identities. This information can be used to aid in your reporting and as a fail-safe to show your business’s attention and commitment to compliance with regulations. PALIDIN considers privacy laws by giving your business the option to configure which information will be stored – and for how long - so that only the minimal amount needed to meet regulatory requirements is kept.