As we celebrate Cybersecurity Awareness Month, IDMERIT understands the challenges we all face while working and playing online. Sometimes, it seems like the internet is plagued with scams, no matter where you scroll and how protected your device is. Though cybersecurity technology has advanced, so too have the cybercriminals.
Cybersecurity can seem costly and confusing to the average small to medium business owner. Especially, if you are now making the transition to digital payments and e-commerce. Figuring out what payment platform to use and worrying over fees, site security, and how to make it work across all devices can be stressful.
Not everyone was fully prepared to go digital in 2020, and cybercriminals took advantage of the lack of mobile security, phishing and spoofing training, a disorder in the economy, and invalidated payment gateways.
Finding out what serves your business best while avoiding non-compliance and data breaches was a challenge. And we at IDMERIT want to make some of those choices easier by providing trusted identity verification solutions that have been proven to work in all industries.
In this blog post, we address a few of the fraud and payment risks you and your customers face when online and prove how our suite of services can provide payment protection and allay most of your cybersecurity concerns.
Identity Verification Solutions for Cybersecurity in Cryptocurrency
Anonymity is one of the benefits of cryptocurrency, but it is also one of its major drawbacks in terms of cybersecurity. Unless you purchase cryptocurrency from one of the few blockchains that record some transaction details, you will be up the creek sans paddle if you lose your money.
Cryptocurrency has great potential for being the future of legal tender, but it has to address a few payment protection and cybersecurity issues before it competes with money. Before you have a cryptocurrency transaction, the Federal Trade Commission (FTC) says you must be aware of three things:
- Payments are irreversible
- No legal redress is available
- There is little to no data protection
In other words, if you fall for a cryptocurrency scam, you can’t ask the bank or the government for assistance to get your money back. You can’t ask the seller for the money back and most likely you can get your data stolen along the way.
Cryptocurrency is a new industry and despite what crypto enthusiasts may prefer, regulation of the industry is coming. There is no way authoritative bodies, businesses, banks, and customers will universally accept it as legal tender without regulation. Part of these regulations will be identity verification solutions that ensure KYC/AML compliance and GDPR compliance.
Crypto enthusiasts may not want to lose their anonymity, but the rest of the world isn’t willing to take the risk on crypto without data protection, payment protection, and anti-money laundering policies in place. As mentioned earlier, some blockchains have taken steps to record some transaction details, but without ID validation, it will still be difficult to discern who did what.
New cryptocurrencies are constantly being created and what a better way to make your blockchain stand out by providing payment protection and having identity verification solutions in place. Imagine how quickly consumers will be willing to adopt a cryptocurrency that has data protection and performs ID validation, automated KYC, and mobile identity verification. Banks and investors will love a cryptocurrency blockchain that will scan and validate ID. Think how awesome it would be if you were that blockchain leading the pack.
Payment Gateway Protection for Fintech
Payment processing companies are a growing part of the Fintech Industry and like the Banking and Finance Industry, Fintech has always been the target of scams and cybercriminals. In 2020, they were plagued by Business Email Compromise (BEC) scams and fake merchant profiles. In 2021, Fintech is tackling the missteps of the payment processing companies and focusing on payment gateway protection to keep the customers and businesses that use the online platforms safe.
The payment gateway or payment processor acts like a middleman facilitating transactions of digital payments between the payee/cardholder’s issuing bank and the payor/receiver acquiring bank for goods/service exchanged.
When payment processors don’t perform proper due diligence, they put their companies, banks, and users at risk for scams. As was the case in Nigeria when Paystack was the vehicle of choice for scholarship scammers. By the time the internet fraudsters were discovered, they had already packed up their site and created a new fake site with images and content from a legitimate site.
One way to deter fake merchants is to use IDMdevice to unmask their fake profiles. Through IDMdevice device fingerprinting, you can find out who is the user behind the profile and why they are interacting with your site. Coupled with IDMkyb, payment gateways can have the payment protection they need, encourage Know Your Business (KYB) compliance, and identify internet fraudsters before they receive a dollar.
Age Restricted E-Commerce Industry Gambling and Gaming with Age Verification Solutions
The age-restricted e-commerce industry involves gaming, gambling, pharmaceuticals, online dating sites, alcohol, tobacco, media, fireworks, cannabis, etc. The goal of age-restricted commerce is to restrict access to a certain age group of users. In reality, few platforms validate ID or have age verification solutions.
The strange part is that certain sectors, particularly gaming, gambling, and media which have the highest infractions for age verification scams in the age-restricted e-commerce industry are the ones who simply ask for a date of birth as part of their age verification solutions. There is no protection for minors and too much reliance on a simple honor system of expecting people to do what is right.
The result: Age verification scams, money laundering, chargeback abuse, identity theft, non-payment, malware attacks, and a lot more scams and social fallouts than we can mention here.
ID validation shouldn’t be an option when dealing with minors and keeping them away from harmful sites and substances. Yet, the calls for age verification solutions were slow in coming. Part of the problem stems from age-restricted e-commerce activity targeting customers. People who buy unhealthy or dangerous products aren’t overly concerned with protection or restrictions.
Knowing this, age-restricted e-commerce industry key decision makers choose not to focus on cybersecurity, after all, the majority of their customer base is all about taking risks. However, through loopholes like weak payment gateways and delivery apps, cybercriminals and minors can gain easy access resulting in hazardous long-term effects for minors. This made the calls for stronger regulations even louder.
The industry was basically gambling and gaming with the lives of their users. Governments in the UK, Canada, India, Germany, and the United States have drafted legislation that demands that lapse sectors of the industry, in particular, data collection from minors, access restriction, and selling cannabis and other harmful products to minors be addressed or the result will be fines or jail time depending on the country.
This international demand on the age-restricted e-commerce industry means there is no time to waste on performing your corporate responsibility and preventing age verification scams, identity theft, and more by implementing age verification solutions where you can validate ID and perform automated KYC. Children need to be protected and when you fail to implement age verification solutions, it’s only a matter of time before parents think that fines are not enough.
Beat Chargeback Fraud in Retail and E-commerce with Know Your Customer Compliance
E-commerce boomed during the pandemic, and with it came a 25% increase in chargeback fraud. Despite changes made by banks and card issuers, merchants were still only able to recover 12% of their losses. Chargeback fraud affects consumers when merchants refuse certain types of payment methods and platforms.
In chargeback fraud, the presumed cardholder claims a fake charge, non-delivery, merchant error, or they had buyer’s remorse and requests the issuer to cancel the payment. Though chargeback is originally intended for consumer protection, some have abused the privilege to the point of cyber shoplifting.
With e-commerce and online payment portals, discerning whether or not the chargeback claim is justified is harder with brick and mortar retail stores. Considering that payments for e-commerce can come through multiple payment processors, chargeback fraud takes longer to verify and is more complex to unravel.
For retail stores, knowing your customer is simple, even with only a one-time purchase. In e-commerce, anyone and any business can purchase your goods from anywhere in the world. Know your customer must be done digitally, but not every internet start-up is aware of the necessity of KYC/AML compliance or even how to perform Know Your Customer.
Those who are focused on making sales and ignore red flags in customer shopping history, don’t have any identity verification solutions, automated KYC or even validate ID. Purchases are done by a simple click and neither party shows any interest in building a long-term business relationship that can be mutually beneficial.
Chargeback fraud isn’t the only thing e-commerce stores risk when they don’t perform automated KYC. They risk receiving money from criminal activity, enabling identity fraud and non-KYC/AML compliance.
Performing basic due diligence through an automated KYC will only take seconds, but it should be performed by a trusted identity management company, and not your new e-commerce store. Customers are always concerned about their data. Prove to them you can protect it by using IDMERIT for your automated KYC.
Using Mobile Identity Verification Solutions to Unmask Synthetic Identity Fraud in the Banking & Finance Industry
One thing you cannot deny is that the banking and finance industry is always focused on protecting its customers’ investments. After all, you cannot convince someone to give you their earnings for safekeeping without proving it will be safe. To do this, banks and other financial institutions require a lot of information during their customer onboarding process.
And this is where the disconnect between protection and service occurs.
Customers prefer an easy and smooth transition without feeling like they’ve been x-rayed under a microscope. But banks and financial institutions need those details to tailor their products to you and to protect your money and information.
In the age of KYC/AML compliance, we all know that skipping Know Your Customer is implausible. Identity fraud is common in the banking industry, but the rise of synthetic identity fraud makes adjusting and securing the digital customer onboarding process vital to the banking and finance industry’s continued core values of protection and safety of their customer’s investments.
Synthetic identity fraud, sometimes known as Frankenstein identity, involves using different pieces of personally identifiable information (PII) such as addresses, driver’s licenses, and social security numbers from multiple people to create a fake identity. Basically, the scammer catfishes the bank. By using multiple personal identifiers, it makes it harder to track down the scammer.
It was only with the entry of COVID-19 that the banking and finance industry began to see the benefits of having more digital processes like mobile identity verification solutions. They had apps but only 16% of US banks were maximizing their app’s potential and using it as part of the customer onboarding process. Problems with automation and mobile identity management have banks and financial institutions struggling to implement proper and safe mobile identity verification solutions on their own. In the end, those who have succeeded in digitizing their customer onboarding process from any device have done so with the help of third-party mobile identity verification service providers like IDMERIT. We can help you digitize your customer onboarding process and KYC/AML compliance with mobile identity verification solutions with IDMautofill for filling out forms on mobile, IDMdevice for device verification, and IDMscan for ID validation.
Most cell phones come with built-in biometric scanners and cameras allowing for up-to-date photos and real-time personal identifiers that we can use as part of the mobile identity verification solution in the customer onboarding process. Mobile identity verification solutions can bridge the gaps in the customer onboarding process while ensuring continued security, compliance, and payment protection from synthetic identity fraud even when customers use their mobile devices. Banks and financial institutions get to adhere to Know Your Business, KYC/AML compliance guidelines, and customers get a versatile customer onboarding process. Win-win for all.
IDMERIT Identity Verification Solutions for Cybersecurity and Payment Protection
No matter your industry, these challenges, and scams are as certain as taxes.
Phishing and spoofing exist in one form or another in most industries. Ransomware runs rampant everywhere and yes, you still shouldn’t go to shady sites to download free stuff. You’re just asking for a virus now.
All is not lost and with KYC/AML compliance and proper identity verification solutions from IDMERIT. You can reduce your customers’ risk from cybercriminals, have payment protection, avoid fines, and have a mobile identity verification solution for a frictionless customer onboarding process. Avoid illicit activities including age verification scams, identity theft, blackmail, and having your business used for money laundering by partnering with us.
Failure to protect yourself results in losing money. Failure to protect your customers results in hefty noncompliance fines and business ruin. Get the protection you and your customers need from IDMERIT and stay safe this Cybersecurity Awareness Month and all year round.