Interactions with consumers are evolving. With each passing year, innovations in convenience, security, and profitability revolve around online transactions. But as the benefits of online transactions multiply, so do the risks borne by both businesses and consumers. Hackers, scammers, and identity thieves develop new ways to exploit both parties as quickly as they adapt to protect themselves from attacks. It is critical in today’s marketplace that those involved in online businesses take steps to protect themselves, their consumers, and their investments with robust identity verification and authentication tools.
When looking for the right system to protect your interests, the difference between these two components can be obscured, especially in terms of compliance with government regulations. In fact, the recent delay in the implementation date of the Federal Trade Commission (FTC) Red Flags Rule from Aug. 1 to Nov. 1 was a direct result of confusion over for whom and in what capacity. implement compliance procedures. It is important that all business owners understand and agree to the appropriate level of identity protection for their needs.
In this article, we’ll explore the difference between verification and authentication, and how both are critical to the overall success of your business.
What is identity verification?
If you’ve ever been asked to show a driver’s license, enter a Social Security number, or submit other qualifying personal information before a transaction can proceed, you’ve undergone identity verification. In other words, identity verification is simply asking a consumer to present a form of identification from their wallet to prove who they are.
While identity verification is only necessary for some companies and is simply an additional security step for others, it is not foolproof. From fake IDs to intricately designed scams, those who would exploit companies are rushing to fix identity verification. And those solutions mean that businesses, consumers, and sensitive information could be at serious risk. That’s where authentication comes in.
What is identity authentication?
Identity Authentication [http://www.electronicverificationsystems.com/products/authentication-question-generator.aspx] takes verification to the next level and is especially important when it comes to online transactions. When verifying a consumer’s identity in person, there may be non-verbal cues or simple inconsistencies that alert a business owner to potential identity fraud. However, those signals are invisible to online transactions. In the world of full order automation, if the consumer can cheat the security protocol, the consumer can put their business at risk.
Identity authentication not only requires consumers to provide qualified identity information, it also requires the person to provide information that is not easy to steal or guess. These are sometimes called “out of the wallet” questions and can ask anything from the names of family members to the amount and frequency of a previous loan payment. The out-of-pocket questions refer to information that only the genuine person can know.
Why are these strategies important?
Implementing identity verification and authentication in your process protects your business from identity fraud and ensures compliance with the “Know Your Customer” portions of government security regulations. However, there is exceptional importance in how these plans are implemented in your transaction process. Simply put, if the verification and identification procedures take too long, are too tedious, or too scrupulous, the customer may feel uncomfortable and take their business elsewhere. Therefore, it is important to implement verification and authentication procedures that are complete and accurate, respecting consumer privacy and maintaining the convenience of the transaction.
