Online businesses including e-commerce, web research companies, digital marketing firms and many……. There are many online businesses and professionals who ask this question to themself daily: How can I validate address? If you are in search of the answer to the same question, here is what you need to know about address verification.
Address verification is important for verifying the address of the cardholder making purchase or doing any transaction using the card. This is specifically important for the transactions made over the internet, as the chances of fraud in intangible transactions increases. With a proper address verification, chances of fraudsters exploiting financial system reduces massively.
How Automated Address Verification Works?
Address verification is carried out when a customer makes a purchase online. To ensure that the purchased product is delivered to the right address and the person buying isn’t posing as someone they are not; online address verification services provide a comprehensive verification of the address listed by the customer. To enhance the process and increase accuracy AI-based address verification solution is becoming popular.
The user is asked to upload a picture of a valid identity document clearly displaying the address. The online solution extracts user address using OCR and also maintain a record in the back office so in case of fraudulent chargeback request proof of user consent is available.
What Fraudulent Activities can be prevented using AI-based Address Validation?
The most common types of scams that are being carried out in the online market places are false chargebacks and stolen cards.
Here is how AI-based validation solution helps in preventing these frauds.
False Chargebacks: The most occurring type of fraud in online market places, false chargebacks are a headache for the businesses as well as consumers having a valid chargeback case. Reaching a certain percentage of chargebacks in a month companies are fined by the banks and even get banned.
If online marketplaces integrate a reliable address verification API in their system that verifies the address and user consent, the false chargebacks will be diminished and only legitimate customer chargebacks will be processed, helping both the sellers and buyers.
StolenCard: Another mostly occurring type of online scam, stolen card scam has led to many financial frauds. The fraudsters get credit or debit card information of a customer, and use it to make purchases online by imposter. By the time the person comes to know about the theft; a handsome amount of financial damage is already done. The person contacts the concerned banks and the platform that was used for making purchases with the stolen cards is fined.
To avoid being a victim of stolen card fraud, online business platforms can use address verification software that validates the identity of user purchasing services or goods.
So far major online business platforms are using address verification software and SMBs operating online could also employ these verification services to validate the authentic customer.