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LibraryreportsAre marketplaces winning the battle for consumer trust?

Are marketplaces winning the battle for consumer trust?

Marketplaces are engaged in an ongoing fight to win and maintain customer trust. This challenge is complicated by the rapid growth of customer onboarding and transaction volumes, which even the biggest marketplaces are struggling to deal with effectively.

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Author
Chris Hooper
Director of Content at Veriff.com
September 29, 2023
Blog Post
Marketplaces
Identity Verification
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Leading marketplaces are continually updating their security procedures but is a step change in identity verification now needed?

Their main focus is to carry out a range of background and activity checks in an attempt to identify fraudulent users. This includes making efforts to verify seller and buyer identity, monitoring transaction patterns for tell-tale signs of fraudulent activity and inviting other users to review their peers. So what exactly are marketplaces doing to win customer trust?

  • Amazon attempts to verify sellers’ identities by requiring them to provide their tax ID and bank account information. In the US, the marketplace also requires sellers to share their ID1 form, a step usually taken by the US Land Registry to facilitate property transactions. 
  • eBay meanwhile attempts to verify sellers’ identities by requiring them to share their phone number and credit card details. 
  • Facebook Marketplace, on the other hand, requires sellers to create a Facebook account. It also provides a rating system and invites buyers to rate sellers’ performance.
  • Artificial intelligence (AI) and machine learning (ML) are also increasingly being used to detect fraudulent activity, such as the sale of counterfeit products and the submission of fake reviews. Amazon, for example, uses ML to identify fake reviews by analyzing review patterns and user behavior.

Marketplaces have made concerted efforts to secure their platforms and win customer trust, but they still regularly fall victim to a cross-industry uptick in online fraud. 

Research by Veriff’s expert fraud team reveals that systematic industry-wide online has increased 46.62% in the past year alone, while online document fraud has leapt 79% during the same period making a surge in marketplace scams possible.

Governments are increasingly aware of these shortcomings and are starting to legislate in order to protect customers. In the US, for example, legislators recently passed the INFORM Consumers act, which now requires online marketplaces to collect, verify, and share identity information for “high volume third-party sellers” – those with more than 200 transactions and $5,000 in revenues during a 12-month period. 

Among other measures, marketplaces are also obliged to suspend seller accounts if they are unable to share seller identity information within ten days of a marketplace’s request.

While some marketplaces already cover a number of these requirements, many will need to implement new measures to be fully compliant or face the risk of legal action under criminal or civil law. 

Complying with these new laws and winning marketplace trust, while also remaining profitable, will prove to be a difficult challenge for many marketplaces, but there is already a solution readily available in the form of Identity Verification (IDV) 

Market-leading IDV solutions can verify customer identity in just seconds using a selfie and photographs of an individual’s government-issued identity documents taken using their smartphone.  

Veriff’s IDV solutions recognizes ID documents from across the globe and it verifies customer identity in just six seconds, with an accuracy rate of 99.99%, enabling Marketplaces to onboard 30% more customers while achieving a high level of security.

Adopting a leading IDV solution, such as Veriff’s, is a clear choice for marketplaces faced with the challenge of securing their platforms and winning the battle for customer trust.

Learn more

Our IDV platform puts market-leading identity verification and high trust well within your reach. Plus, you can also tailor your verification processes to suit your industry and brand. If you’d like to learn more about how we can create an identity verification process for your business, get in touch with us today and book a personalized demo.