Address Verification Service – Significance in the E-Commerce Industry

With the onset of the global pandemic, digital or online shopping trends have risen sharply. The number of online purchasers is anticipated to grow to 2.77 billion by 2025. This whopping figure displays the constant hike in the demand ratio of consumers globally. This also highlights the elevating value of the e-commerce industry. Address verification service is one of the crucial components that make up the e-commerce industry. It plays an essential role for online businesses that want high customer turnover and conversion rates.

What You Need To Know About Online Address Verification 

Every business in the e-commerce industry requires a customer’s address to dispatch and deliver orders swiftly. Some companies entirely run digitally, without having any physical franchise, and they provide goods and services online. Thus, they should verify address of potential customers to ensure that they work swiftly without causing any inconvenience. An address verification system (AVS) refers to the mechanism that validates the information related to customers’ addresses. Any business is incomplete without a streamlined and systematic address authentication. 

It allows the company to know about the exact location of a customer and eliminates the possibility of a typing error or incomplete address information by customers during check-outs. Additionally, it ensures higher conversion rates and customer retention, leading to hiked revenue generation for online businesses. Most essentially, it is a critical tool for identifying false customers with illegitimate identities. Therefore, the e-commerce industry needs to verify customers’ addresses to ensure effective compliance with anti-money laundering and counter-terrorism financing regulatory standards. 

Verifying an Address to Deter Chargeback Fraud

Scammers often commit chargeback fraud against online businesses. A chargeback is the amount returned to a payment card, be it credit or debit, if a customer disputes the transaction. The trader, selling goods and services, or the consumer’s bank initiates a chargeback. Another name for chargebacks in payment refund. The fraud associated with a chargeback is known as chargeback fraud and is usually termed “friendly fraud.” It occurs when customers disguise their fraudulent intentions using the chargeback process to gain a refund. They contact their bank to dispute the transaction. Therefore, address verification is an effective fraud deterrence method and ensures a seamless UX (user experience) during online shopping. It guarantees security in the e-commerce sector by preventing fraud and eliminating opportunities for imposters. 

Address Validation Solution Providers 

As per officially available stats, about 19 percent of deliveries fail because of inaccurate address information and the absence of essential details. Consequently, online businesses face hefty revenue losses. This is where automated solutions come to the rescue. Software as a service (SaaS) providing companies have devised state-of-the-art software solutions for the e-commerce industry to conduct verification of address. They provide automated API software to solve the challenge of address entries during the check-out process in online shopping. 

API stands for application programming interface, and it integrates new tools or applications with already-existing software. Thus there are several types of address authentication solutions that e-commerce businesses can easily incorporate into their customer data interface. For instance, type-ahead address validation is the quickest method in the online commerce industry. It provides a list of suggestions to customers when they enter a few details. Furthermore, when customers select one option, it facilitates them by auto-filling the rest of the fields. 

Identity Documents Required for Address Verify

Authentic SaaS companies provide solutions that simplify the address verification process for e-commerce businesses and customers. Such AI-backed solutions extract relevant information from documents that customers submit. The following are the steps involved in the procedure of verifying address.

1. Firstly, particular credentials, like the customer’s full name and address, are examined. The authenticity and legitimacy of the documents are also checked through the detection of any signs of forgery.
2. Data extraction is the second step after scrutinizing the documents. Machine learning-based character recognition software, such as optical and intelligent character recognition, is used to retrieve data from the provided documents. 
3. After that, the customer’s address is verified against specific prerequisites. For example, certain details like the house number or zip code are compared with the information they provide. This is crucial for address verification because any missing detail could lead to failed deliveries.

As mentioned, artificial intelligence employs self-learning and automatically enters the data after the customer manually adds it once. Online forms conveniently save customers’ details such as name, address, postal code, email address, and QR code feedback. Such solutions boost the reach of an online company’s website, leading to high revenues.

In a Nutshell

To summarize, businesses operating in the e-commerce industry must validate address of the customers using digital software solutions. They can reap numerous benefits, such as high conversion rates, revenue generation, chargeback fraud mitigation, and ensuring AML/CFT compliance.