E-commerce is the fastest-growing industry in terms of revenue generation. According to the Statista report, the industry amounted to $3.53 trillion in the year 2018. This amount is expected to grow by up to $6.57 trillion by 2022. The advancement in internet and smartphone technologies have made it possible for customers to shop from home. To get a more accurate idea, 53% of the internet users shop online. The benefits that e-commerce provides to its customers are increasing. Especially at this time when a lockdown is implemented globally, businesses are operational online only, the e-commerce sector is booming. Everyone is compelled to buy from the comfort of their homes to contain the virus.
With this increase, the revenue e-commerce industry generates is also rising. Even though e-commerce business is boosting, the challenges online retailers face are also increasing. Here are some challenges faced by the online retail sector. With a rise in online sales, the chances of online fraud double. Credit card frauds are the most reported ones in the e-commerce industry. Among these frauds, credit card chargebacks and friendly frauds are most recurring. According to invest, Credit card chargebacks are increasing at the rate of 20% per year and friendly fraud rose by 41% in the last two years. Chargeback and friendly fraud occur when the customer comes up with various reasons to file a dispute either, with the online retailer or the credit card companies directly. Other than fraud, online retailers also face several risks like shipping errors, failed delivery, unsatisfied customers, and increased operation cost due to address data errors. Many e-commerce customers report undeliverable shipments as one of the top business challenges. These issues can be resolved if online retailers have an effective identity verification solution including address verification system.
Although retailers use online address verification at the checkout process, still the issues regarding address verification are increasing. Sometimes the customer enters the wrong address details due to a long check out procedure. Statistics show that one out of three customers leave the website at the checkout process due to time taking procedure. Clients get frustrated due to long verification processes and end up switching to any other platform.
With progress in digital technology, digital address verification techniques are becoming popular. For the e-commerce industry, digital address verification techniques can make the verification process faster and increase accuracy. The retailers can verify customer-provided addresses with the credit card company. In case the information does not match with the credit card detail. Furthermore, document verification is also done to validate the address of a person. A client is requested to upload the image of their documents and by using OCR technology the data is extracted from the provided documents to verify the true identity and address of a person. The retailers can ask the customer to enter the correct relevant information. It reduces the risk of shipping errors, failed delivery, and frequent increase in operating costs due to address data errors. Government-issued ID cards, driving license, passports are included in the list of these documents. Moreover, address verification can also assist online retailers in reducing chargeback and friendly fraud. In cases of fake disputes, the retailers can present address verification proofs.
The accurate address verification is crucial for online retailers to successfully deliver the product to the customer. This will not only increase customer satisfaction but it will also help in the prevention of fraudulent activities. So, the e-commerce companies should adopt an effective and efficient address verification technique. It will also make checkouts more frictionless by decreasing product delivery risks and frauds.
