Veriff deploys biometric tool to tackle ‘buy now, pay later’ fraud


Veriff will offer its biometric identity verification (IDV) services to Twisto, a buy now, pay later (BNPL) business. The partnership will enable Twisto to expedite the IDV process for its customers, while also ensuring compliance with know your customer (KYC) regulations.

Following the start of the collaboration, Veriff’s artificial intelligence (AI)-powered biometric identity verification technology will be available directly through Twisto’s platform.

“The BNPL payments market is highly regulated, and as a business, in this space, we need to ensure that we comply with KYC and anti-money laundering (AML) regulations which require us to verify the identity of our customers,” said Twisto Head of Product, Pavel Prucek.

Since integrating Veriff’s selfie-powered technology, Twisto has reportedly experienced a customer conversion rate increase of almost 15 percentage points.

“The biggest challenge we faced was balancing the tradeoff between the customer friction and the reliability of data we gather in the IDV process. Veriff enables a seamless and quick IDV flow that also provides the customer data and information we need to ensure compliance.”

Twisto also said its BNPL platform has also almost fully eliminated verification application returns due to Veriff’s streamlined IDV process and ability to flag low-quality or incomplete pictures submitted during the verification process.

‘Buy now, pay later’ fraud on the rise

The partnership between Veriff and Twisto comes at a time of increased fraud attempts against BNPL infrastructures.

An analysis published on TotalRetail suggests that while BNPL tools are an efficient way to shop and pay for services, they also create an avenue for fraudsters to explore new types of scams.

“Fraudsters are now trying to exploit the fact that they can walk away with goods at either a fraction of the retail price or in some cases at zero cost,” wrote Maanas Godugunur, director of fraud and identity at LexisNexis Risk Solutions in the TotalRetail article.

According to the identity expert, the best way for businesses to protect themselves from such scams is to deploy efficient KYC tools.

“Businesses prioritizing identity trust tend to experience less fraud. A dynamic, multilayered fraud defense creates a significant deterrent for cybercriminals,” Godugunur wrote.

Still, the identity expert says there’s no such thing as zero risk in terms of fraud, and that the new BNPL trend is one of the many examples of how quickly criminals can adapt to new technologies.

“The businesses that succeed and thrive in the midst of this uncertainty and risk surrounding BNPL will be those that shore up their fraud defenses without unnecessarily impacting customer experience,” Godugunur said.

“This means having the ability to track current and evolving consumer behavior across the online customer journey and using intelligence from every interaction to better identify, model, and predict future trust and risk.”

BNPL becomes more common in Nigeria

A new investigation by Rest Of World is suggesting many BNPL startups in Nigeria are investing substantially in solving problems connected with weak ID verification and limited consumer credit records.

CDcare and M-Kopa are only two of the companies operating in the country that offer short-term lending to consumers, particularly for consumer technology products such as smartphones, laptops, and household appliances.

According to Rest Of World, only 2 percent of the 106 million adult population in Nigeria have access to bank credit, so BNPL is a rising and very real alternative.

“However, many remain skeptical about the prospects of the market, particularly with regard to loan recovery,” reads the research article.

“And others doubt local companies will be able to replicate the scale and success of international firms like Affirm and Klarna without enduring some serious credit risks in a low-income country with limited credit information.”

The new payment trend comes amid a wave of digitalization of national infrastructure in Nigeria. Weeks ago, Nigeria’s Minister of Communication and Digital Economy confirmed the country’s digital ID registry should be complete by 2025.

More recently, a Federal High Court in the country announced biometric voter registration is continuing beyond the originally proposed deadline of 30 June.

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