How can KYC benefit BNPL?
Every year ecommerce sales get cash registers ringing. Irrespective of category, people love the sales for the huge discounts on offer. But what’s got people loving these sales? Disposable incomes? Perhaps. Thirst for the good life? Maybe. Buy one of the biggest contributors to the sales figures is the Buy Now, Pay Later schemes (BNPL). Research has it that, over the next 2 years, BNPL is set to comprise 14% of transaction value for ecommerce companies. That’s a growth of 5X from 3% in 2021.
But there are downsides to this ease. There are concerns that people amass debts larger than they can repay or can afford to. Fraud is the main concern for BNPL companies. With a lot of emphasis given on onboarding, a faster onboarding process is followed where many necessary checks are looked over. Fraudsters often make use of this urge to onboard and use fake or stolen identities to open accounts and purchase goods. At times, fraudsters could also hijack existing customer accounts to make illegitimate purchases when insufficient checks are in place. Apart from illegitimate debts that the unaware customer is thrown into, these fraudsters also impact the credit scores of these customers.
So, how do companies ensure that they protect their bottom lines as well as interests of their legal customers from these fraudsters? One of the easiest, and the most necessary changes is in employing agile Video KYC features. Video KYC that incorporates Artificial Intelligence to help ease the process of documentation and onboarding for the customer while also ensuring that the onboarding process is in line with guardrails, rules, and regulations set by the company as well as the legal financial system.
AI powered KYC platforms can also help companies check for ‘payability’ of the customers which mean are they eligible to pay off the amount based on his capabilities and would not put him in a position of bankruptcy.
At the end of the day, BNPL companies will shape up to be one of the key economic drivers of the next decade. However, only the ones with good repute will survive. And one the easiest way to reputation is the promise of safety, security, and ease.
If you are looking for a trustworthy Video KYC platform, do get in touch with us.