How to overcome the challenges of cross-border identity verification

We live in a global digital economy where cross-border transactions are now the norm. International payments are expected to surge from US$190tn in 2023 to a staggering US$290tn by 2030, according to recent reports.

At the same time, innovations in payment technology mean international transactions are getting faster. A pilot in 2021 saw the fastest payment ever sent from Australia to a UK beneficiary, with confirmation of credit and funds available in just 36 seconds.

However, fraud is still a significant concern. Whether it's businesses engaging in international trade or an individual sending money to family living overseas, cross-border transactions are more exposed to criminal abuse, with regulators seeing cross-border activity as 'riskier' than domestic transactions.

The need for secure cross-border transactions is more critical than ever. Yet, international transactions come with unique challenges in safely onboarding genuine customers and ensuring regulatory compliance.

The question is, how do you verify the identities of customers in different geographic regions and prevent cross-border transaction fraud?

Know your global customer

The first step to mitigating cross-border transaction fraud is verifying the identities of both the sender and receiver.

However, verification depends on where the customer is sending money from. The regulatory environment across the globe varies, with each country or region implementing its own unique compliance requirements.

In many countries, like Australia and New Zealand, identity verification is informed by the global money laundering and terrorist financing watchdog, the Financial Action Task Force (FATF). However, not all countries require the same identity checks or even define digital identities in the same way. So, organisations must understand the nuances of the national regulations where they are operating.

Navigating a world filled with identity data

Another critical challenge facing businesses dealing with global remittances and international transactions is the sheer diversity of identity documents and identity reference data worldwide.

Adding to the confusion, the different types of passports, travel documents, social security cards, driving licences and other documents in international circulation increase every year.

The availability of identity data varies from country to country and some data sources are better than others. Some countries have rich and reliable data sources, while others have less sophisticated digital identity ecosystems. As a result, recognising genuine customers is easier in some countries compared to others.

For example, in Egypt, 55% of all payments are cash-based and 67% of the population doesn't have a bank account, making it challenging to verify individuals through credit data.

It’s important for organisations to identify which data sources are available and how they can be used to reliably verify identities.

With GBG identity verification solutions, you can verify customers against our extensive global data coverage, spanning over 350 datasets from partners locally and globally. This eliminates friction and frustration in the onboarding journey with higher verification match rates, delivering quicker and safer customer onboarding processes.

Creating a smooth user experience

No matter where in the world they are located, customers demand a frictionless user experience. Fast and effective identity verification and onboarding are necessary to ensure customers can benefit from making or receiving quick payments overseas.

Any extra forms, checks and processes add time, effort and even frustration to the onboarding experience, leading to dropouts. A study commissioned by GBG found that almost half (47%) of consumers would abandon a brand after two negative digital interactions.

That's not to say that global consumers don't expect some friction, but it’s essential to ensure it's not friction for friction's sake. It should be targeted and appropriate to protect customers from fraud while allowing them the speed they expect from overseas transactions.

Leveraging comprehensive and reliable global data sets for near real-time identity verification enables organisations to provide this.

Cross-border identity verification you can trust

Whether you're a global remittance provider or a business looking to pursue global growth opportunities by onboarding customers in new markets, you will need to access comprehensive international identity data sources and identity document libraries you can trust.

GBG is making it easy for businesses to identify international customers and transact with confidence around the world. Our ever-growing international identity data coverage has expanded to include national identity data sets and enhanced identity reference data in a growing list of countries.

With comprehensive global identity data from GBG, you can speed up international money transfers and meet customer demands to move money fast without opening the door to fraud. Contact us to get started.