Digital Identity Verification Automation for B2B

Automated Digital Identity Verification: The New B2B Authentication Standard

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The ultimate goal of every business is growth. However, when you are growing step by step, you face different challenges. Business verification is one of the most common and crucial challenges on the list.

As your business expands, you will acquire more customers. But if you are still using old-school manual methods to verify these businesses, it can take weeks or even months to complete the process, potentially leading to client loss, fraud, and many more issues.

In the digital age, every challenge has a digital solution. Are you a business ready to invest in an automated process to solve the problem of losing clients?

In this article, we are going to talk about how you can implement an automated business verification and onboarding system to maximize your efforts. This might be the perfect time to say goodbye to lengthy manual processes and welcome automation to your business.

Why B2B Businesses are Struggling with Business Verification and Onboarding?

B2B enterprises, which are grappling with payment fraud, have identified the importance and challenges of validating their customers’ digital identities.

According to research data, an eye-watering 98% of B2B retailers, manufacturers, and marketplaces have either become victims of fraud or missed opportunities by refusing to engage with legitimate firms.

This causes these businesses are facing an average loss of 3.5% of their annual sales revenues.

Not only that, this research also reveals that 54% of retailers and 44% of manufacturers and marketplaces have reduced to onboard new customers due to fraud challenges.

The worst part is, that mistakes during the process of bringing in new customers have caused real businesses to be labeled as fake, stopping them from getting new chances to do business.

This shows the challenge of how businesses are struggling to identify new business customers and verify them. A survey acknowledges that 49% of businesses are facing this problem in their businesses and from that, 16% of them consider this to be their biggest challenge in customer verification and onboarding.

As a result of that, businesses are considering implementing automated anti-fraud verification systems to their businesses and most of them experienced how it helped them to lower their revenue loss significantly.

This highlights the importance of implementing automated systems to overcome some of the biggest challenges that B2B enterprises face on a daily basis.

digital identity verification statistics

Modernizing B2B Verification Strategies: First Steps

We found that failing to verify the legitimacy of a business is a major cause of revenue loss, especially for smaller businesses. This happens a lot because of wrong alerts about fraud that end up hurting real business chances.

On average, companies lose 3.5% of their yearly sales because of worries about fraud, and 1.6% of that is because they didn’t sell to real businesses.

When it comes to smaller businesses, it hits them even harder. They lose more of their sales because of worries about fraud, about 5.1% of what they make, and 2.9% of that is because they couldn’t sell to real businesses.

Most businesses are taking action only if they face any serious consequences. This is one of the main issues that comes with manual processes.

However companies that put trust in automated solutions are able to reduce their sales losses in a significant way.

Now we know the common challenges and how businesses overcome them with automation services. Let’s have a look at how you can replace your old-school verification and onboarding processes with an automated system.

Step 01: Self Audit about the digital identity

One of the first steps to focus on is to check the current method you are using for client verification and onboarding to identify the gaps and plan your roadmap towards modernization.

If you can’t identify these gaps in the first place, then missing out on real business opportunities will be a recurring mistake.

As a result, manufacturers, retailers, and marketplaces need to modernize their approaches to identity verification to avoid missing out on new revenue opportunities.

The following five questions comprise a self-audit of identity authentication processes for organizations.

How many legitimate businesses are declined due to false positives?
Does our organization use payment card verification to authenticate buyers?
Does our organization use address verification services to verify new customers?
Does our organization use automated alerts to verify transactions?
Does your organization use automated web monitoring to minimize fraud?

Key takeaways after the above questions:

A survey conducted with the participation of 150 organizations confirmed that 54% of them cause missing out on legitimate customers because of manual processes and wrong fraud detection tools.

Payment card verification is a common method used for fraud detection. The same survey confirmed that 53% of B2B businesses are using this method because of the high usage of corporate credit cards as a payment method.

But what if your customer places a larger order? People who are placing larger orders prefer to use trade credit over other options. If your organization fails to provide such payment options to the customers causes losses in sales and potential future customers.

Integrations such as USPS address matching and verification is a good way to verify addresses. The survey confirms that 47% of businesses are already using this method to verify new business customers.

However they point out that this tool still needs individual follow-ups for proper confirmation.

55% of businesses confirm that they use automated alerts to double-check transactions. They mentioned that it helps them to identify legitimate purchases quickly and identify suspicious ones immediately.

47% of them said that using automated web monitoring methods helps them to identify suspicious domains and protect their business from negative problems by eliminating them.

Step 02: Developing a modern digital identity verification strategy

Companies offer different B2B payment options for their customers like invoicing and term payments have different ways for customers to pay each other for business purchases. Some use invoices or pay over a period, while others use card verification to check if the customer’s payment is real.

But when fraud happens in business payments, it’s often because someone’s pretending to be someone else or because it’s hard to watch for identity theft.

Not many companies think all the ways they check identities are equally important when they start working with new business partners. Research shows that most companies mainly rely on card verification when they start working with new business customers online.

However companies using smart and automatic ways to stop fraud use more than one method to check who’s paying them.

For example, while most companies use card verification to check identities and stop fraud, companies with better fraud protection also use things like checking addresses and watching online activity.

Only some companies think all these ways of checking are equally important, but those that do understand it’s better to use many ways together than just one alone.

Other common ways companies check if a new business is real include using search engines to check addresses and using companies that do automatic checks to confirm a business’s identity.

Step 03: Choosing a third-party digital identity authentication platform

PYMNTS did research and found that most companies aren’t very happy with the digital tools they use to check if someone’s real and to stop fraud.

But the companies using automatic tools are happiest with what they have. Only about one-third of all companies are really happy with their tools for checking identity and stopping fraud.

But almost half of the companies that use automatic tools feel good about what they have. Only a few companies that use manual tools feel really good about them.

Among different types of businesses, online shopping companies are the happiest with their tools, while manufacturing and retail companies are less satisfied. Also, middle-sized businesses are happier with their tools than small companies.

Many organizations think that using better digital tools is a good way to solve problems by checking if someone is real and stopping fraud. This is especially true for companies that aren’t happy with the tools they have now.

Digital Identity Verification and Fraud Prevention Methods

  • Card verification value services
  • Automated alert for transaction anomalies
  • Automated web monitoring
  • Address verification services
  • Document and identity authentication
  • Automated underwriting systems
  • Payments innovation
  • Purchase amount filters
  • Solutions from third-party providers
  • Velocity filters

Legitimacy of Verification Methods

  • Check the company through its employer identification number
  • Use search engines or websites to check the company’s address and phone number
  • Use due diligence firms that perform automated know-your-customer/anti-money laundering compliance
  • Review court records in the jurisdiction in which the business is registered
  • Check the validity of companies’ official business addresses
  • Check for membership or accreditation through community groups
  • Request a credit report through firms that provide reports on business
  • Subscribe to third-party databases that provide business and credit information
  • Review reports from the U.S. Department of Commerce
  • Check the references or reviews on companies’ own websites and contact them
  • Review filings using a government database
  • Request trade or banking reference

What B2B businesses should look for in a technology solutions provider and why features matter

B2B businesses sometimes have trouble coming up with new ideas because they rely too much on old tools, don’t have enough people or technology, and don’t know much about new anti-fraud tools.

But if businesses are having trouble confirming who other businesses are, they can use new automation tools that use different ways to check. Some businesses ask other companies for help with anti-fraud tools and confirming identities quickly.

Here are some things to look for in these tools:

  • Onboarding that promotes a streamlined identity verification process without compromising security
  • Anti-fraud monitoring to cover transactions using multiple payment methods
  • The ability to manage omnichannel sales as business operations scale
  • Secure, frictionless invoicing and accounts payable/account receivable management features


Fraud has a big effect on how customers feel and how businesses can grow. As new technologies and ways to pay come up, there are more chances for fraud to happen.

If businesses don’t check who their customers are properly when they first sign up, it can make customers unhappy, cause fraud, and even stop real businesses from buying things.

To fight fraud and keep growing, businesses should use smart and automatic ways to check who their customers are and watch out for fraud. This helps them keep making money and keep their customers happy.

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