Fraud has been a consistent problem for businesses all over the world. The increased popularity of online shopping has made it an even bigger one because with no need for physical contact it becomes a lot harder to verify a customer.
Chargeback Fraud
On top of traditional types of fraud, one new type has grown in popularity recently – chargeback fraud. Some people call this ‘friendly fraud’ because payments are legitimate, they’re just recalled by the bank under excuses like non-delivery, or having been misled about subscriptions.
With fraud as a whole costing billions already, it’s important to try and combat it any way we can. After all, many businesses are operating with a delicate balance, trying to stay afloat while funding as much growth/investment as possible. Imagine a highly leveraged company suddenly being charge-backed a month or two of profits and you can see how catastrophic the effects might be.
For the small business, this is an even bigger problem, though developments in technology and the existence of outside verifiers can be an incredible help.
Third Party Verifiers Explained
Third-party verifiers are specialists in verifying the identity and intent of a customer before they make a purchase from your business. Firstly, using an outside company keeps the workload off you and your business. For a self-employed person or small business, this is the time that would be vital for actual work or growing the business. For larger businesses verification can amount to a massive time investment, so again the load is lightened.
These verifiers are equipped with vast amounts of technology and information on consumers. They can cross-reference with other information and customer history to find things you wouldn’t have access to. For example, one of the ways they use to reduce fraud at Netverify is to check each customers record for pre-existing reasons to suspect they could be fraudsters, such as checking for multiple past chargebacks.
Such companies have tech which also allows them to detect if a person is using pictures rather than real-time verification, whether ID is authentic and also whether the IP being used matches the location and has a clean history.
Other Benefits
TPV’s (Third-Party Verifiers) also bring other benefits, outside of more advanced methods and time-saving. For starters, there is a lot more security involved for both sides when it comes to using a TPV. You wouldn’t want to hand your cash over to any random person, and consumers are no different. Having a reputable TPV puts their minds at ease about the payment process too and shows you as legitimate. Forbes even states that credibility and business can both be increased by using a TPV.
Customer relationships are also less likely to be affected when TPV’s are left with the financial/fraud side of the process. The customer isn’t dealing directly with your business in their dispute, so they have no reason to hold anything against you. Also, consider how even more time and stress is saved by not having to deal with customers on a financial front!
Even with today’s brief look, it’s easy to see how much of an impact using a good, reputable TPV can have for your business.