The rapidly developing technology of today is altering the way of customers shop for things. The success of a brand in the market depends heavily on the customer experience given the digital trends and their adoption. A complex checkout process still causes customers to abandon their shopping carts, but inadequate customer service costs companies $1.6 trillion every year. In addition to paying additional shipping costs, businesses are also experiencing lost deliveries as a result of inadequate address verification techniques.
Only accurate and trustworthy information is entered because client addresses are routinely validated. This process has reduced error chances while submitting their address information.
What does Address Verification Service Mean?
Before users conduct any online transactions, a process called Address Verification Service (AVS) validates addresses of their customers with related information. Companies use AVS as a tool for fraud protection and to register trustworthy customers who can attenuate chargeback fraud and mislaid deliveries.
Address Verification Services (AVS) Types
- Type-ahead Verification: Address information is entered by a customer and gets multiple suggestions to select one from the list provided, which is a time-efficient method.
- Post-entry Verification: Clients type their address manually and receive a number of suggestions according to what they are typing and select one of them before entering a complete address.
- Drop-down Verification: There are 6 out of 10 e-commerce businesses in the United States which use this method, which includes a drop-down menu allowing users to choose the city, state, and country from which they want to verify address.
Address Verification Working Process
The online address verification process can be done in three steps:
Submission of Identity Documents: The system asks the user to upload a photograph of a holding ID document. The image on the identity document is compared to the user’s facial identification.
Upload other PoA: Furthermore, individuals or businesses need to upload some documents that include Proof of Address (PoA). these documents allow the system to verify the address data.
Verification of Information: The address information on provided documents is being verified through various checks. The results are shared with the back office and with the customers as per their status.
When Companies Require to Verify Customers’ Address
With a few anomalies, most jurisdictions follow the rule of address verification (for example, it is not required in Hong Kong). Financial services, fintech, payment, and e-money organizations, as well as other companies in a related industry, are often impacted. Business entities that are subject to KYC checks as part of national AML laws are described in AML laws in a particular jurisdiction. Whenever a transaction over a certain amount is made (usually defined in the AML law), clients are required to provide proof of address.
List of Documents That are Acceptable to Validate Address
You must be aware that the documents you provide must not be older than three months before diving into the ideal documents the system accepts for address verification. If not, the system will automatically reject the process after reviewing the documents. The following documents can be used for verification.
- Identity Card
- Employment Letter
- Utility Bills
- Educational Documents
- Financial Statements
- Legal Agreements
All of these records, which act as proofs of address (POA), must be updated. After the document has been examined for type and authenticity, OCR software is used to extract the name, date of issue, and address. If any document is found forged or photoshopped you are notified on an immediate basis and this can lead to the termination of your onboarding process.
Fraud prevention is the primary goal for every company needing address verification. Any business, including financial institutions and e-commerce sites, must verify addresses. Chargeback fraud is a problem for online retailers, according to data from Bank Card Services, it increases by 41% every two years, with losses this year approaching USD 30 billion.
If a financial organization wishes to reduce online identity theft fraud and manage reputational risk, it can do better by using an address verification service.
Reduced Bounced Back Shipments
It is very common for businesses to experience returned shipments and without valid addresses, businesses will likely have to deal with this problem frequently. As per CNBC reports, the total amount for online sales was $4.583 trillion and 20.8% of them will be returned. The bounced-back shipments cost $953.2 billion roughly. Address verification services might help to control and minimize the escalating volume of these shipments.
It’s crucial to have faith in data in order to achieve any business strategy and objective. A similar number of businesses view data as a crucial tool for increasing profits and providing better service to customers. Most companies utilize data to generate new business prospects. Address verification avoids unnecessary outbound mailing and inefficient campaigns.