Which Businesses are in Need of Address Verification – A Brief Guide

Business

The rising increase in chargebacks, fake deliveries, and other criminal activities has led companies to develop a robust mechanism to verify customers. If companies lack authentic verification checks, there are chances that fraudsters will register and exploit the services. Alongside fake identity information, criminals use false addresses to escape legal consequences. 

 

Therefore, online industries like e-commerce, finance, and others are employing digital identification and address verification for secure customer onboarding. Address verification corresponds to services that authenticate address-based information. Businesses use address verification services (AVS) to prevent fraud, mitigate chargebacks, and misdelivered products. Read below to know more about this service. 

Working Mechanism of Address Verification System

Services providing address verification of customers are gaining immense popularity. This is so because they back businesses’ identification process while ensuring legit customers onboarding. The process is user-friendly and cost-effective.. It has the following simple steps:

  1. Upload Identity and Facial Proof 

The system asks for identity and facial proof. Customers upload their documents while holding them in front of the camera. The system then matches facial identity with photos on documents. 

  1. Upload a Supporting Identity Documents

In this step, the system asks for additional supporting evidence. Customers upload documents with address information. This way the encrypted service carries out address verification to make sure businesses are onboarding real customers. 

  1. Verification and Presenting Results

In the third step, the system extracts data using OCR and analyzes the information. It performs a series of verification checks. After completion, the results are presented in front of end-users and later stored in the back-office using an API call. 

What Does the System Check?

The online address verification system extracts relevant identity data by using uploaded documents. The requirements vary depending on companies’ requirements. However, some checks that the system performs are:

 

  1. Full name of customer
  2. Template and authenticity check of documents
  3. Address mentioned on the documents and their format
  4. Documents are not forged, they do not have crumpled edges.

 

After these checks, the address of customers is verified by using certain parameters. Information like house numbers, streets, postal codes, and social security numbers are cross-checked. If detail is missing, the system sends a secret code to customers to ensure that there is no fraudulent entry. 

Major Industries that Need Address Verification

All industries are in need of address verification to counter and mitigate identity fraud. Here’s why address verification is a must-have for every institution. 

E-commerce Industry

The E-commerce industry lost $20 billion in 2021, as per estimates by Statista. The prime reason behind this loss is chargeback fraud and failed deliveries that occur because of fake addresses. However, address verification online adds an extra layer to customer verification. Companies can therefore prevent address and payment fraud. Through these encrypted solutions, online platforms identify billing addresses alongside credit card ownership. 

Read Also: How to Build an E-commerce Website from Scratch

Healthcare Sector

Healthcare institutions are confided with the most sensitive information that requires ultimate safety. When healthcare centers provide off-the-center assistance, they need to be sure that it is reaching the real customers. Therefore, address verification ensures that entered details belong to the legit client. This way healthcare intuitions can communicate with the right patients while minimizing the hassle. Furthermore, they can keep the information safe by delivering documents, bills, and records to accurate addresses. 

Financial Sector

Financial institutions and banks validate address to conduct customers checks, make accurate deliveries, and ensure compliance. To run KYC checks for risk assessment, the finance sector collects the required information of customers. Therefore, it is mandatory to ensure that customers exist in the real world. This is so because criminals take hold of false documents and addresses especially to create fake accounts. They further use these for availing insurance, govt-based benefits, carrying out money laundering, and financing terrorism. 

Marketing Agencies

Marketing agencies are supporting the growth of many businesses around the globe. They attract customers by sending e-mails and delivering postcards. Offline communication is way more effective than online one. Therefore, address verification makes this interaction cost-effective. Also, they can reach the target customers that will benefit the businesses in turn. 

Utility Services

Utility businesses are largely dependent on payments. Fake addresses lead to no payments that affect companies’ reputations while deviating customers. However, through online address verification, companies can collect payments and locate the customers. When a store sends the offline bill to buyers, it reaches on time, if not, there are fewer chances that the provider will ever get its payment. To combat this issue, address verification services provide companies with accurate verified information. This way they also reduce risks of failed deliveries. So much so, to prevent utility-related identity fraud. 

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