Marketplaces and Identity Verification: How to Optimize the Process?

Marketplaces have become an important sales channel for businesses. However, as the number of buyers and sellers on these platforms increases, it has become more difficult to guarantee the security of transactions. Identity checks have therefore become a key element in guaranteeing the security of transactions on B2B marketplaces.

The benefits of identity checks on marketplaces

Firstly, identity checks can help prevent fraud and scams by ensuring that sellers and buyers are who they say they are. In addition, they can help guarantee product quality by ensuring that sellers are legitimate businesses with a sales history. Identity checks can also provide a better user experience by ensuring that transactions are secure. This reduces the risks for both buyers and sellers.

The different methods of identity verification on marketplaces

Today, there are many methods of verifying identity on marketplaces. One of the most common methods is to verify identity documents by means of an identity card or passport. Marketplaces may ask sellers and buyers to provide a copy of their identity document for verification via an identity verification procedure called KYC (Know Your Customer) or KYB (Know Your Business). The purpose of these different verification methods is to guarantee the security of transactions and confidence between buyers and sellers. Here are the most commonly used methods:

• E-mail address verification : this consists of sending a confirmation link to an e-mail address when registering to ensure that the address provided is valid.
• Telephone number verification : a verification code can be sent to the seller's or buyer's telephone number to ensure that the contact is valid.
• Government identity verification : as mentioned above, a KYC/KYB method can be put in place to strengthen the security of the marketplace.
• Verification of a physical address : marketplaces may ask sellers to provide a physical address for transactions requiring the shipment of physical products.
• Third-party identity verification : these services can use public data to verify the identity of sellers and buyers and their sales and purchase history.
• Trust rating systems : systems can be developed where, for example, a user earns points based on their behaviour on the platform. The more points a user has, the more likely they are to be considered 'trustworthy'.

From one marketplace to another, verification methods can vary depending on the type of product or service sold online, and the needs of the platform. It should also be borne in mind that these methods may offer additional security, but may also be more costly and complex to implement. The aim of the marketplace is to provide a secure environment for these users.

Security considerations for identity checks on marketplaces

When implementing identity verification on marketplaces, it is important to take security considerations into account to protect customer data and avoid fraud. Marketplaces need to ensure that their identity verification system complies with security standards such as the GDPR (General Data Protection Regulation). We have also written an article about the impact of the GDPR on marketplaces. Additional security measures such as two-factor authentication are also important for online identity checks and monitoring suspicious transactions. They increase security on the platform.

Best practice for identity checks on marketplaces

To maximise the benefits of identity verification on marketplaces, it is important to follow best practice.

Firstly, it is important to clearly communicate identity verification requirements to sellers and buyers. Customers need to know exactly what they need to do to verify their identity and be able to buy or sell on the marketplace. Terms and conditions of sale should be kept up to date.

In addition, offering several identity verification options to meet customers' needs is also essential. Customers may prefer to use a specific method of identity verification, so it is important to offer several options to maximise the chances of conversion and offer flexibility to users.

Finally, it is important to monitor market trends (set up a trend watch) and adapt identity verification methods accordingly. As identity verification methods evolve rapidly, it is important to keep up to date in order to offer an optimal identity verification experience to marketplace customers, so as to be able to deal with potential identity thieves.

Obvy, a complete solution for managing and securing your online transactions

We've said it before, but it's important to remember that a transaction is not just a payment. Payment is just one stage in the transaction! Obvy offers an all-in-one solution for platforms selling goods and services online, whether they be marketplaces, e-commerce sites, software publishers, tradespeople, etc. With Obvy, you can benefit from the most popular services and payment methods for collecting and paying in a highly secure environment.

Obvy offers dozens of turnkey services and functionalities (payment, delivery, security, user and transaction management platform, dispute resolution, promotional campaigns, etc.) that enable you to manage all your transactions from start to finish, from the moment a product is put on sale through to payment and delivery of the goods.

Security and compliance with all current regulations are central to Obvy's concerns. This is why Obvy has set up an anti-fraud system based on 30 checkpoints as well as identity verification systems which are carried out via a personalised page hosted by Obvy.

Obvy is also able to carry out biometric identity checks, simply and dynamically via video or the user's phone.

We invite you to discover all the features we offer businesses (marketplaces, e-commerce, software solutions, etc.), enabling you to increase your revenues simply, quickly and cost-effectively.