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Address Verification – Eliminating Wrong Deliveries and Chargeback Fraud

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The e-commerce industry is currently growing continuously. According to a report, online companies generated $4.9 trillion in revenue worldwide in 2020. The most important part of an online business is the verification of customer addresses. Inaccurately typing an address can cost you time and money. Due to an increase in chargebacks and other fraudulent activities, businesses are using efficient methods for verifying individuals.

Online retailers and other businesses have developed reliable authorization tools and authentication procedures to guarantee genuine client onboarding. Without an adequate identity verification system, criminal activity becomes much more likely. The frequency of refunds increases gradually on a daily basis, and so does fraud. Online address verification is therefore crucial to protecting online businesses from a variety of scams. The popularity of address verification services has grown recently, and this is due to a number of factors. Let’s go over each significant component of this solution so that it can decide which is best for the company.

An Insight to Address Verification 

As a security measure, businesses use address verification methods to verify customer addresses before each transaction. This ensures that all interactions and transactions are secure and limited to authorized users. To verify the legitimacy of the customer, it is very important to verify that the address is correct.

The address verification service uses cutting-edge AI-based technology to optimize customers’ address information. Businesses can reduce chargeback scams and shipping costs associated with fraudulently providing incorrect and misleading addresses. It also provides a foothold for reputational risk. This increases the level of security for AML/CFT standards.

Why is Online Address Verification Important?

Due to fraud involving chargebacks and returned deliveries, e-commerce companies experience significant annual losses. It is challenging to deliver goods to the intended location because con artists frequently give inaccurate addresses. Address verification systems provide an additional level of security that lowers the likelihood of fraud. Having a trustworthy system for verifying addresses is more crucial than ever. Numerous factors affect the need for this service by the business. The following are some reasons:

  1. Battling Fraud

The primary reason a business would need to verify address is for this reason. Verifying an address is crucial for all businesses, whether financial or online retailers. According to Statista, chargeback fraud cost online businesses $20 billion in lost sales in 2017, making it a problem for them. To protect their online operations, businesses must therefore implement security measures. Verifying addresses enables companies to better manage reputational risk and lower online fraud.

  1. Address Verification – Decrease Returned Shipments

Business owners are likely to experience this issue often if their addresses are incorrect. Returning deliveries is one of the biggest disappointments for any company. According to CNBC, online sales will reach $123.9 billion, with refunds accounting for 30% of that total. These goods have a $37 billion estimated cost. These deliveries can be controlled and their frequency reduced through the use of an AI-driven address verification system.

  1. Enhanced Client Experience

All businesses strive to enhance the user experience, but online retailers do the hard work to give the best to their customers. Businesses can be certain that their list of clients is up to date by using online address verification.  Because of this, companies can reach them with ease and offer quicker delivery services. 

  1. Better compliance with FATF recommendations

To maintain business integrity and ensure consumer safety, every business must adhere to FATF regulations regarding identity verification. Address verification allows online businesses to verify the identity of their customers and effectively comply with KYC/AML regulations. Additionally, 6AMLD’s regulatory approvals make compliance difficult. However, approval services make it easier for organizations to comply with the law.

Conclusion

Account takeovers, chargebacks, and other fraudulent activities are becoming more frequent. It is essential for all businesses to fight these crimes because con artists have, regrettably, developed more advanced techniques to achieve their nefarious goals. Currently, the methods used to verify identities are inadequate. Systematic address verification can improve the efficiency of the KYC procedure. It can assist all e-commerce companies in lowering chargebacks and fraudulent transactions.

For organizations to prevent fraud and protect the platform, an AI-based address verification system is a need. The technology facilitates easier client onboarding and ensures that operations go without a hitch through the use of several cutting-edge models.

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