Research regarding digital identity verification by Finextra and PYMNTS.com shows that accurate, authenticated and unaltered geolocation data is essential for merchant acquirers, payment facilitators and ISOs to use in their sub-merchant onboarding and KYC processes.
So, why are so few in the payments processing ecosystem currently using it?
Finextra found that this kind of granular data is vital to preventing fraud, with geolocation data being specifically called out as an example.
Detecting malicious activity and preventing fraudsters from making it through your onboarding process is a necessity, but many payments processors rely on outdated tools and techniques like IP addresses – or worse, nothing at all – to determine an applicant’s location. Any bad actor with a VPN or proxy can easily change their IP address in order to circumvent these simple checks.
PYMNTS.com notes that omnichannel fraud detection must be used because fraudsters often use multiple devices and tactics to circumvent safeguards. That’s because bad actors can jump from device to device to try and dodge onboarding KYC checks, so any solution designed to catch them must work across different platforms, including mobile devices.
Utilizing the advanced geolocation technology that GeoGuard offers will ensure the location data captured from the user’s device is accurate, authentic and unaltered. Since GeoGuard’s geolocation solutions work across mobile devices, desktops and different platforms combined with the fact that the data can’t be altered using VPNs, proxies or other spoofing techniques, you can be assured that if the location data says the user is in Utah, the user really is in Utah.
If the sub-merchant is trying to alter their location data in any way, you’ll know that instantly and be able to take corrective action.
But, it gets even more complicated. Internet Retailer found that legitimate sub-merchants often use several payment processors at the same time. How do you tell the difference between a legitimate business and fraudsters trying to sign up on multiple different platforms?
The answer lies again in utilizing accurate, authenticated and unaltered location data. Internet Retailer recommends that fraud detection providers make themselves available across multiple payment providers to detect exactly this sort of situation. GeoGuard’s solutions can easily integrate into any Merchant Acquirer or Payment Facilitator’s existing onboarding processes, to catch bad actors across different platforms before they can make through.
All of this research goes to show that accurate, authenticated and unaltered geolocation data is a key component of fraud detection and prevention during the onboarding process.