Address verification is used by P2P marketplaces, e-commerce sites, fintech platforms, and more to confirm that a user actually lives at or has access to the address provided at onboarding. It is one component in a larger identity verification flow with added benefits like advanced identity assurance and smoother delivery logistics. However, using a solution to verify international addresses that isn’t reliable internationally can lead to higher acquisition costs, more user friction, and additional logistics challenges.
Some international address checkers use API to pull address information from databases like those maintained by government agencies, postal services, and credit bureaus. Information pulled from these databases is compared to the user’s inputted address to complete verification. Unfortunately, these databases don’t update in real-time, meaning that while the API call is nearly instantaneous, the address information received may still be inaccurate or out-of-date.
Mailers can be sent to a provided address with users asked to confirm that they received the mailer. This method takes time, costs extra money in the form of international postage, and can be resource intensive when managing the mail flow in and out, but it can be effective for combatting stolen or spoofed address information.
Platforms can ask users to provide proof of address with a lease, utility bill, or official ID or document. While this path is high security, it’s also high friction and may frustrate users who want to maintain as much privacy as possible. Additionally, the associated manual review can be costly if there’s no software solution in place to analyze documents automatically.
It’s clear that security measures like address verification are becoming table stakes in our increasingly connected world. But what roadblocks stop global enterprises from adopting address verification technology more broadly?
Many address verification software solutions use an API to pull address data from a central database, like the ones maintained by the DMV or credit reporting bureaus. However, different countries will have different organizations in charge of address data, meaning companies may have to subscribe to a different vendor API for each country they operate. Some countries don’t have a centralized address database, meaning that companies need to use private databases that may be incomplete or infrequently updated, leading to false negatives.
In addition to these challenges, there’s also the challenge of consumers who don’t appear on databases. In the United States, about 26 million Americans are “credit invisible,” meaning no record of them exists with any credit reporting agency, and thus that data can’t confirm their identity. These coverage challenges represent a significant disadvantage when verifying international address data.
Recency is critical for any data source that is part of an address verification workflow. If the data isn’t current, customers could be erroneously denied verification because of a recent move or other change that’s yet to update in the database. This mistake costs the company valuable customer engagement and may even prevent customers from onboarding entirely.
Out-of-date address data can also present a security risk. Suppose a bad actor has access to someone’s old PII, including their address. In that case, they may use that information to pass address verification in a database approach using outdated address data.
Keeping an address database current can drain resources significantly, and recency usually isn’t within a company’s control beyond choosing which vendors they do business with.
Other address verification methods, such as proof of residence using official documents, aren’t much more efficient. Requiring users to scan or photograph utility bills, leases, or identifying documents increases onboarding friction. If a company uses manual review to assess documents, it significantly increases the cost and time of verifying each user. Because of the resource intensity of this type of review, it also has very limited scalability.
Despite these challenges, simply going without an address verification solution isn’t a realistic option for many global companies. Without address verification, it’s much easier for bad actors to anonymize themselves and commit abuses without risk. Forgoing steps in a robust identity verification process can also reduce consumer trust in a brand or a marketplace. Users may feel they can’t trust that those they interact with are who they say they are.
Fortunately, a global address verification method can combat the above challenges for an efficient, effective, and frictionless solution.
Real-time address verification uses location signals from cellular networks, WiFi, GPS, and other sensors to collect location information about a user’s mobile device in real-time. This location information can then be cross-referenced against the user’s provided address information to complete verification.
A real-time address validator can solve many problems facing international companies who want to use address data in their identity verification flows. For instance, unlike with address databases, coverage across different countries isn’t a problem because real-time address verification uses location signals from the user’s mobile device, meaning it can verify the location of any onboarding user regardless of their address records. Real-time address verification is also more cost-effective than databases, as it doesn’t require companies to purchase different international address verification API subscriptions for other nations.
Here's a clip of Incognia CEO and co-founder Andre Ferraz explaining how real-time address verification helped a marketplace improve payment approval rates:
Another issue solved by real-time address verification is the challenge of recency. Many address database solutions will self-describe as “real-time,” but this only applies to the API call made to the associated database. In other words, retrieving the address information happens in real-time, but it is only updated periodically. Because real-time address verification uses mobile device signals to capture real-time location data, there’s no worry about the captured information being outdated.
Lastly, because real-time address verification can work automatically and across borders, it’s much less resource intensive than processes requiring manual review, user friction, or multiple vendor subscriptions. Real-time address verification can work passively to collect location data for verification, meaning it requires no additional input from users.
Every enterprise has different needs, but when it comes to trust and safety, it’s becoming increasingly clear that some form of identity verification is a smart way to head off fraud attempts further in the user journey. For international businesses, real-time address verification tools are the best way to secure that extra user trust without overspending resources or risking increased user frustration.
To learn more about how Incognia supports platforms using real-time location technology, readers can see our case study about how we helped a car rental marketplace automatically verify 72% of new users using location verification.