Fintechs are currently spreading their tentacles, offering new products and services as they look for new revenue streams amid challenging economic conditions.
Think credit card firms moving into banking-as-a-service; challenger banks shifting into subscriptions and investments; or savings startups moving into crypto.
Likewise, payment companies are diversifying.
Take European payments giant, Checkout.com, one of Europe’s most valuable fintechs, which this year fattened its offering by moving into the red-hot area of Identity Verification (IDV).
While Checkout.com — valued internally at $9.35 billion — might still be synonymous with payment processing, it is hoping that its IDV product will soon become a cornerstone of its balance sheet.
There is no doubt digital gatekeeping is a hot area right now, amid fraudsters trying to wreak havoc online and identity fraud evolving with deep fakes and deceptive documents growing in sophistication.
The speed of AI
Harnessing machine learning and AI, Checkout.com says its interactive IDV product can identify customers in under 120 seconds, trumping the competition with its speed and fraud detection rates.
It has been trained on datasets from billions of facial recognition templates and identity documents and, in beta testing, it verified over ten million identities, correctly identifying over one million fraudulent attempts.
It works by customers using video mode on a mobile phone showing an identity document and their face while the AI guides users through the process.
It provides customer feedback on how to show document authenticity and move their face so the AI can recognise them to combat fraud. It will also tell users if the document they are scanning is invalid.
Checkout.com’s IDV product is the brainchild of French startup Ubble, which the payment giant acquired last year, as it looked to bring IDV in-house.
The startup was co-founded in 2018 by François Wyss, Juliette Delanoe, and Nicolas Debernardi and had around 100 employees when it was acquired by Checkout.com.
“We saw a gap in how the market was served online and that is why we started Ubble with a huge emphasis on live video steaming automated by AI to replace video call centres where you had to chat with an operator.”
The core belief behind Ubble (whose name is derived from the Hubble telescope, which Wyss points out has “exceptional vision”) is that its IDV “had to be as reliable as face-to-face”.
Compared to a still of a picture, Wyss says Checkout.com’s IDV interactive video product is better at combating fraud as can capture more data and has a “better pass rate”.
For Checkout.com, bringing IDV in-house bestows multiple benefits.
Not only is it adding a new revenue stream but it could also help strengthen ties with its existing customers should they use its IDV product.
Not only that, but it also ensures that Checkout.com and its customers are compliant and on top of changing regulations across the sector.
For the moment, Checkout.com is offering its IDV to existing clients, as well as new clients while Checkout.com’s IDV workforce could soon be selling its payment services to its IDV clients.
Two of its current flagship clients are Uber Eats and Docusign while Ubble bought several existing clients including the French government and some leading French banks including BPCE across with it.
Checkout.com is also planning to launch an IDV product in the US very soon.
“The main difference is that it’s a little bit less accurate and a little bit more automated than the one that is regulated in Europe.”
Current rules differ between Europe, where some form of human IDV intervention is required, and the US, where no human touch is required.
Along with complying with know-your-customer regulations, IDV can also be used to check the age of the customers or identify potential fraud before it happens.
Lead image via Ubble. Photo: Uncredited.