BNPL Challenge 2: Capturing Today’s Digital-Savvy Consumers Without Inviting Fraudsters

In this second post in a three-part series, Socure’s Buy Now, Pay Later (BNPL) industry experts explore the biggest challenges faced by the BNPL industry. In this post, Socure’s VP and Head of Product Marketing Anthony Winslow writes about the challenges of creating friction-free identity verification and onboarding for good customers, without opening the door for fraudsters. Read the first blog in this series by Socure Founder & CEO Johnny Ayers here.

Buy Now, Pay Later (BNPL) offerings are especially attractive to today’s younger, digitally native, and credit-averse consumers, such as Gen Z and millennials. Perhaps it’s no surprise that these digital-savvy audiences have sky-high expectations when it comes to their online customer experiences. That’s why instant, seamless identity verification checks are a critical differentiator in order to acquire BNPL customers who expect faster, technology-enabled services right now, on-demand.

“Consumers don’t understand the need for offline manual review, nor do they care. Instant fulfillment is the new expectation”¹ – Aite Group

Opening the Door for Good Customers while Keeping Out Fraudsters

As BNPL platforms look to open their digital doors wider to improve the customer approval process—reducing friction during customer onboarding in the process—the gaps for fraudsters to sneak in can simultaneously expand. Meeting customers’ expectations for a seamless UX while also increasing risk is a significant double-edged sword. Or perhaps, a double open door is a better metaphor: How do you open the door to good customers without having it swing open equally in the opposite direction?

Customer Experience is at the Heart of BNPL Platform Success

Again, many of today’s consumers have very low tolerance for friction online. For BNPL providers’ identity verification and fraud prevention strategies, this means that even the most minor performance delay, extra click, or manual review can be the difference between gaining or losing a good customer.

A frictionless approach to identity verification and fraud prevention at onboarding is more than a nice-to-have. It’s a core foundation for customer and business growth. The equation is simple, even as the challenge is difficult: a frictionless identity verification experience leads to more acquired customers, which leads to more revenue.

Purpose-Built for the Next Generation of Consumers

BNPL platforms that choose Socure’s purpose-built BNPL identity verification and fraud solution don’t need to trade more risk for more business. In fact, Socure’s BNPL customers have seen an average of 30-60% increase in auto-approvals, achieving overall rates of up to 97%, as well as a 10x improvement in false positive fraud reduction. They’ve also seen up to 85% reductions in fraud across all ages and demographics, with up to 400% reductions in fraud for the riskiest populations. Best of all, BNPL providers achieve these fraud prevention results while their end customers enjoy ZERO friction.

Legacy identity and fraud verification systems rely on credit data—which often leads to false rejections or friction for many legitimate Gen Z, new-to-country, and other credit-invisible and hard-to-identify consumers. Socure applies in-depth data science, analytics, and proven machine learning models to hundreds of online and offline data sources. Then, the company analyzes the entire lifecycle of a consumer’s identity, from origination through every subsequent transaction, while also looking at all dimensions of risk related to the identity and transaction: name, email, phone, address, date of birth, Social Security number, geolocation, device, velocity, behavioral, transaction information, merchant details, historical purchase behavior, and network intelligence.

Socure’s 360-degree view gives customers the most instantaneous onboarding in the market, solving for both false positives and false negatives in milliseconds. The result is seamless onboarding for a frictionless prospect-to-customer conversion. Legacy vendors—with an approach focused on only new account risk or individual pieces of an identity, such as email, phone, address, and device—simply can’t match Socure’s speed or accuracy.

Learn More

Just as today’s digital-savvy customers expect more from you as their BNPL provider, you should expect more from your identity verification and fraud platform. When you choose the Socure BNPL solution, you’ll open those auto-acceptance doors wide without inadvertently letting the fraudsters and other bad actors sneak in behind the good customers. Schedule a call with our BNPL experts to see how you can optimize your customer onboarding UX while minimizing risk today.

Stay tuned for the final post in this three-part series on BNPL industry challenges. In September, Socure’s Senior Director of Product Marketing Brigitte Engel will examine how the BNPL industry can best fortify itself to face a new competitive landscape.

¹https://www.avanade.com/-/media/asset/other/banks-struggle-with-customer-experience.pdf