Reducing eCommerce Fraud with Automated Driver's License Verification-04

Reducing eCommerce Fraud with Automated Driver’s License Verification

When the COVID-19 pandemic broke out, online shopping instantly became the new norm for many. With closed retail shops, beverage shops, and car dealers, as well as limited access to grocery stores, the ability to allow consumers to remotely acquire a broader set of needed goods and services while avoiding the potential health risks of going outside became an overnight mandate.

According to ACI Worldwide Research, global retail eCommerce sales skyrocketed a staggering 209% in April 2020, due to the novel coronavirus outbreak. In the US alone, pure eCommerce orders experienced a 110% growth compared to the previous year.

With eCommerce on the rise, however, relentless attacks on eCommerce by malicious actors are matching that pace. As online retailers and traditional brick and mortar merchants scale their business operations to meet the surge in demand for remote purchases, they must also enhance security measures to curtail criminals who exploit stolen identities to commit fraud.

Online retailers must ensure that they are transacting only with legitimate individuals by implementing trusted identity proofing measures in their platforms. Identity verification is a vital component of enterprise security because it enables early detection of identity anomalies that catch criminals before they infiltrate the system.


eCommerce Fraud Can Hurt eCommerce Growth & Profitability

With the growth in eCommerce fraud, the pace of online fraud has also exploded. As of December 2020, online shopping is the most reported fraud case recorded by the United States Federal Trade Commission.

Criminals all over are using stolen personal data information to create new accounts or take over existing customer accounts and perform fraudulent transactions and chargebacks.  A fraudulent chargeback occurs when an individual disputes a transaction with their credit card company for alleged non-receipt of goods. This scam means the merchant must repay the funds but loses the purchased product or service.  E-tailers have also seen an increase in friendly fraud where the real cardholder fraudulently denies buying the goods, or a family member makes a purchase without cardholder approval. These security threats cause significant losses, reputation damage, and customer distrust.


Biometric Identity Verification Can Reduce ECommerce Risk

By leveraging biometric identity verification technology, eCommerce platforms can improve their customer identification practices and prevent felonious individuals from cheating the system. The risks of not verifying your customer’s identity grow significantly for high-price, brick and mortar businesses such as auto-dealers and furniture stores who are quickly shifting to eCommerce fulfillment. Many high-price purchase retailers who offer financial loan or leasing options to customers are also subject to Know-Your-Customer (KYC) regulations that mandate the enterprise verifies their clients’ identity and weeds out fraudsters.

Online retailers must leverage advanced biometric identity verification technologies that are scalable and easy-to-integrate into their operations to reduce fraud and the deceptive misuse of identity data to create user accounts. Technology such as mobile facial biometrics can remotely verify identity by a simple selfie and a facial biometric match to the photo from a government ID. Moreover, it is important that these solutions deploy additional security features like liveness detection to prevent fraudsters from using fake photos or altered videos to impersonate real customers.


Driver’s Licenses for Identity Document Authentication

ECommerce merchants may want to further eliminate risk by layering in identity document authentication that ensures the credential is genuine. While customers are often asked to present a valid driver’s license as evidence of their identity, this practice is often not practical in most online shopping transactions.

Authenticating the identity document of a person through valid credentials is imperative in distinguishing fraudsters from real customers. Many will try to use forged IDs to get past eCommerce platforms’ defenses.

To ensure the accuracy of a driver’s license authentication, online merchants must replace legacy systems with advanced technology that automates the credential verification process.


The Need for Automated Identity Proofing Solutions

ECommerce sites need to perform identity proofing in a scalable, fast, and accurate way. They must be able to authenticate large numbers of customers at high confidence levels.

Manual checks are too slow and are often prone to human error, resulting in bad customer experiences. As digital natives, modern consumers expect online services to be convenient and efficient. When the online platform fails to meet their demand, they will look for another eCommerce company that offers better services.

Online retailers must adopt an automated system for identity verification and identity document authentication to satisfy their customers’ needs while ensuring security in their operations.

By harnessing the power of mobile identity verification with the ease of a selfie and quick document scan, eCommerce companies can expedite customer verification and quickly spot signs of fraud to prevent criminal attacks.



The pandemic has created a significant shift in the eCommerce landscape, affecting how e-tailers and traditional brick and mortar businesses will operate beyond the age of COVID-19. Fraud also is catching up to eCommerce platforms, with criminals becoming more relentless in exploiting these enterprises.

With the boom of online shoppers during the global health crisis, enterprises must improve their defenses against eCommerce fraud. They must replace manual processes with automated systems to authenticate their customer’s identity and prove the genuineness of the identity credential.

Automation enables online retailers to perform the verification process in a scalable, secure, and efficient manner while ensuring identity matching accuracy. It reduces human error and expedites the procedure to enhance the customer experience and improve productivity in operations.

Proof™ by authID is an identity proofing solution that leverages mobile technology to deliver trusted identity verification and mitigate fraud across industries, including eCommerce. To provide e-tailers with the highest level of identity assurance, Proof also offers automated identity document authentication including validation of US, Canadian, and Mexican driver’s licenses.


Schedule a Demo with authID is a provider of an Identity as a Service (IDaaS) platform that delivers a suite of secure, mobile, biometric identity solutions, available to any vertical, anywhere. authID‘s automatic identity document authentication solutions can help online retail enterprises curtail eCommerce fraud with a high certainty level. Contact authID today at 1 (516) 778-5639 or click here to schedule a demo.