While identity verification software has been around for years, it’s often overlooked by online merchants. But merchants’ increased reliance on e-commerce is spurring a greater need for this type of technology. So, whether you’re a global retailer or an online business selling locally—or both—it’s critical to protect your brand and customers from the rising threat of chargebacks due to fraud or other dishonest activity.

Why identity verification is important for your business

Identity verification is a must-have tool in your anti-fraud arsenal. It helps you ensure that the person making the transaction is who he says he is and not an identity thief posing as an authorized user.

That’s why you need to use an online system which verifies identities by cross-referencing data from multiple trusted sources to confirm whether or not someone is who they say they are. This means you can reduce chargebacks, and improve customer satisfaction and retention rates — all while protecting yourself from fraudsters looking to steal from your business.

What are the main types of online fraud?

The most common types of fraud include:

Chargebacks: A chargeback occurs when a customer disputes a transaction with their bank and asks for the money back. The reason for this can vary, but it often involves fraudulent purchases—when someone uses stolen credit card numbers to make purchases online.

Card-not-present fraud (CNP): CNP fraud happens when someone makes a payment through an online channel like email or social media instead of physically presenting their card to make the purchase in person—for example, by buying something on eBay without meeting up beforehand with the seller to exchange goods for money (an unfortunate situation if you’ve ever been scammed by an online retailer).

How does identity verification prevent fraud?

Identity verification software is the most effective fraud prevention tool in the market.

As a merchant, you need to stay on guard against chargebacks. If your business receives too many chargebacks, it can have some negative consequences:

• You’ll pay fines and fees associated with each chargeback.
• Your credit card processing company will penalize you every time they have to process a dispute.
• You may lose sales to competitors who offer lower prices and better customer service as a result of their higher profit margins (if they sell products that aren’t subject to as many disputes).

How does identity verification improve the customer experience?

Identity verification software improves your customer experience in several ways. Firstly, it eliminates the need for customers to enter personal information. By using digital identity authentication in place of physical identification cards and documents, you can provide an easier and faster checkout process without compromising on security. This also reduces the amount of time it takes for customers to complete a purchase.

It also prevents chargebacks by allowing merchants to verify user identities immediately at checkout—before they have a chance to initiate a chargeback dispute or request refunds through their credit cards.Finally, this software means that customers don’t have to re-enter their payment information every time they purchase with your business because the software stores their details securely within its database until they next visit your site or app. This saves them time while making it easier for you as well since you’ll know exactly who’s making purchases from one day to another.

Is identity verification no different from captcha?

Captcha is a standard method of protecting website sign-ups from bots. Captcha stands for “Completely Automated Public Turing test to tell Computers and Humans Apart.” It uses distorted text that humans can read, but computers cannot. The idea behind captchas is to prevent automated signups on websites by requiring users to enter a code that they can see but the software cannot.

While identity verification is a must-have tool in your anti-fraud arsenal. It’s an important step in the customer journey, and it can help you deliver a better experience to customers. Identity verification can even help reduce chargebacks.