Address verification in the banking sector is commonly referred to as the authentication of the cardholder’s address at the time of payment or transaction. As the name of this service represents, the billing and shipping address of the user is verified against the documented address to ensure that the transaction is legitimate. Address verification service is especially for online businesses since they are more exposed to cybercriminals and fraudulent transactions. 

How Address Verification works

Address verification is usually performed by the banks at the time of onboarding the client. Back to the days of manual verification, the address verification was done manually through a phone call or POS terminal. Living in the world of digital transformation, the verification is now done online through different documents that include an identity card, passport, driving license, passport, and even utility bills, etc.  

Address verification service authenticates the proof of address for verified user identities, authorized deliveries, and payments to curb customer frauds with proper evidence. The online platforms that integrate Address verification services, verifies the address of the user before carrying out the transaction. Today’s address verification systems are based on artificial intelligence and machine learning algorithms can verify the address of an individual in real-time.

Identifying Suspicious Activities to curb frauds

The most important aspect of integrating address verification service is that it doesn’t only authenticate the address of the individuals but also verifies the remote presence of an individual by mapping a remote address with a physical address. This helps businesses in identifying suspicious behavior and activities. 

For example, if multiple transactions from a person’s card are recorded on the same day and that too from different locations (cities/regions), then it will definitely be counted as suspicious behavior. In such cases, the system will trigger a warning and stop the payment process midway. This is an efficient way to deter fraudulent payments in real-time.

Address Verification – An essential service for E-commerce sites:

E-commerce sites are on the target of imposters and cybercriminals. Due to instant purchase functionality and simple authentication checks, the account takeover frauds are on the rise. With the readily stored information in the account of the users, the fraudsters just change the address and make fraudulent purchases which lead to chargebacks for merchants. This results in heavy loss for the business. Implementing address verification services in eCommerce sites can prevent these fraudulent purchases and false chargebacks. 

Address Verification – a key step in KYC Process

The increasing fraud ratio has pushed regulatory agencies in laying strong compliance foundations for all the businesses dealing with financial services and customer data. KYC regulation is imposed on all businesses which enforce business owners to confirm customer identities and meet customer due diligence (CDD). The organizations rely on various factors to confirm the identity of the users; address verification is one of them.

Verifying the address of the individual guarantees that he/she is the legitimate reseident of some particular region. In some situations, the organizations are prohibited from onboarding region-restricted individuals. To access the services, the individuals often lie about their residence and present forged documents. Through AVS, the forged doucments can be identified and the identity of the user can be verified in case of legitimate proof. In this way, organizations can meet KYC compliance efficiently.

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