With emerging digitization, creating a bank account, online transactions, and availing remote financial services is now a reality. However, the digital payment industry can not leave ID document verification unattended. To ensure that legitimate entities are applying for financial benefits, efficient identification is a must-have. Similarly, an increase in cybersecurity threats and identity fraud is forcing digital payment industries to integrate robust IDV measures.
Digital payment providers should establish multi-layered customer verification for secure onboarding. Furthermore, incorporating document checkers online will help prevent fraudsters’ access. AI-powered IDV tools cross-check the legitimacy of customers’ identity proofs while keeping accuracy intact. Hence, the identity verification market is all set to reach $32.94 billion by 2030. This blog entails how ID document verification benefits the digital payment industry.
Document Checkers Online Drives Accuracy for Industries
Digital payment providers are facing a spike in customer demand regarding online transactions and other remote financial services. Instead of physical visits to banks, clients prefer transferring funds by using their smartphones. As the digital payment industry is undergoing technological advancements, their need to upgrade operations is simultaneously increasing.
While customer attitudes toward financial services are changing, criminals also see digital payments as their free ticket to conceal illicit funds. They commit document frauds to exploit online transaction service providers and steer clear of IDV processes. Furthermore, money laundering, data breaches, account takeover, and synthetic identity fraud is forcing industries to integrate ID document verification. They accurately validate government-issued proof of identity.
AI-powered ID document verification enables digital payment providers to access global databases. This helps in identifying customers belonging to high-risk regions as well as those falling under sanctions. Similarly, Politically Exposed Persons (PEPs) and other watchlist screening checks help digital payment providers to deter sophisticated money laundering attempts.
Integrating document of identity verification automates customer onboarding by employing OCR tools for data extraction. Furthermore, the ML algorithms analyze them for forgery detection and identify signs of tampering. This way, AI-powered ID document verification services eliminate data discrepancies. Hence, digital payment providers can decrease soft declines, unnecessary delays, and client drop-offs.
Further benefits of online ID document verification solutions are in the next section:
Accurate Data Extraction with OCR Tools
Manual document verification involves human errors, typological mistakes, and data discrepancies. Furthermore, payment providers also face an increase in false entries that only cause wrong suspiciousness detection but can lead legitimate customers to legal proceedings.
Manual verifiers can no longer be trusted as they are incapable of identifying sophisticated document frauds. Fraudsters use advanced tampering tools such as Photoshop to counterfeit holograms, information, signatures, and other characteristics.
Digital ID document verification employs AI-powered forgery detection techniques to identify data tampering. Furthermore, it uses OCR for extraction which eliminates discrepancy errors and typological mistakes. Upon their arrival for creating an account, the system asks customers to upload identity proofs which are later analyzed by ML algorithms. Hence, by integrating ID document verification digital payment providers can limit fraudulent transactions.
Provides Red Flags Detection
Criminals are becoming more sophisticated and use advanced forgery techniques to camouflage identities. They then exploit digital payment services to conceal their proceeds of crimes. Furthermore, high instances of money laundering and terrorism funding are raising questions regarding security measures of financial institutions. Criminals prepare counterfeit identity proofs to bypass IDV checks, due diligence, and risk assessment.
Red flags for money laundering and other illicit financial activities are hard to detect by manual verifiers. Keeping in view the sophisticated fraud risks, integrating robust ID document verification solutions has become a liability for digital payment providers. With AI-powered IDV services in place, financial institutions can limit hassle for customers. Furthermore, verifying documents online reduces friction during onboarding and while performing a transaction.
Forgery Detection and Format Authentication
Different regions have distinct document formats such as holograms, ink types, stamps, paper, and signatures. This makes ID document verification challenging for digital payment providers. As customers are availing remote transactions, identifying risks associated with international transfers has become tricky. Therefore, digital payment providers need to incorporate efficient verification documents online solutions to authenticate identity proofs coming from different regions.
AI-powered ID document verification services pace up customer onboarding by providing authentication of different formats. With signature tools in place, they further validate the legitimacy of documents.
Online document verification solutions provide a multi-layered approach to strengthen the digital payment industry’s operations. They increase levels of security and accuracy by deploying AI-powered IDV tools. Breaching OCR and ML algorithms is a tough task for criminals which helps online payment providers to deter their intentions more efficiently. This way, financial institutions can stay put with KYC regulations. Ultimately, online ID document verification decreases fraud risks, enhances positive customer experience, and safeguards digital payments.