Online identity verification - A solution to facets of digital criminals activities

Identity verification of customers online is crucial for online merchants to mitigate the risks of a variety of criminals activities in the digital world.

Posted on June 02, 2020 by Alex

Online identity verification -  A solution to facets of digital criminals activities

The internet use for Online Travel Agencies or eCommerce is increasing with each passing day. The digital businesses operating in the digital environment are facing several challenges among which fraudulent transactions are the ones. The fraudsters roaming in the digital channels target the online platforms to perform a variety of malevolent activities. The bad actors aim to access online user accounts. Through those, the financial, as well as customer information, is compromised that is further used for malicious activities.

All sized enterprises and online merchants are adopting appropriate measures that could help them detect and prevent fraudulent activities. The online payment scams are increasing which includes a variety of high-scale financial frauds. These include money laundering, terrorist funding, and even the crypto exchanges and businesses are used to disguise the source of money. These frauds include various stages. The source, ownership, and identity are concealed in such a way that it gets complex for the system to identify the individuals. For this, merchants are now employing digital security measures that correspond to the online identity verification.


The process of identity verification involves the verification of individuals through various methods. The digital identity verification can be done through documents, biometrics, etc. It totally depends on the industrial niche. For instance, the banking industry would require to Know Your Customer (KYC) verification of customers which requires documents. Similarly, the digital payment services providers can verify their customers through biometric identification based on facial recognition.

Synthetic Identity theft 


The lack of sufficient security measures in digital channels become the reason for synthetic identity theft. The fraudsters enter into the user accounts through credentials stuffing and other tricks and steal the information of users. The identity theft information is then used to make fraudulent transactions over the network, impersonate people through phishing attacks, get illegal health benefits and certificates, get prizes, launder money, and many other criminal activities.


Chargeback frauds

A study shows that online travel agencies are expected to lose about 130 billion dollars in digital ‘Card Not Present’ fraud between the years 2018 and 2023. The fraudsters also claim chargebacks that have two major reasons. One is that the fraudsters make transactions from the card of the same legal entity and the real owner claim that it was not made by him. Hence the transaction is done by some bad actor. The second is that the children use the credit card of their parents to buy goods online without the permission of their parents. The parents then claim chargeback over it.  

All this list of fraudulent activities can be mitigated by taking into consideration the appropriate actions and measures that could help reduce the risks of criminal activities. 

The online merchant which are selling online services to their customers which need to be secured. As per the page on PayPal, “all the businesses that used to collect the credit card information of their customer to process their online payments are strictly required to:


  • Protect the information of a cardholder 
  • Maintain a proper cyberattacks and vulnerability management program
  • Implement strong customer authentication and control measures
  • Build, maintain as well as take measures to secure the network in order to protect the card information
  • Regular monitoring of transactions and risks assessment measures 
  • Maintain the policy for information security 


These security measures could help online businesses reduce the risks of fraud and synthetic identity theft that could ultimately curb criminal activities.