As we continue to accentuate compliance ahead of Tipalti Illuminate 2022, we want to highlight the challenges and consequences of onboarding fake users
We once considered onboarding to be a process that could take days to weeks to confirm someone’s identity.
But this is 2022. We’re all connected online all the time. And the pandemic had a role to play, which led to the day’s dependencies on internet tools and instant digital payments.
Thanks to the internet connecting households through computers, mobile devices, and even television screens, we now make payments that connect us to businesses, individuals, and providers around the world.
And due to the COVID-19 pandemic, online and digital payments became a necessity. The demand for instantaneous payment solutions only grew further as the pandemic intensified.
With time, the world understood that the time spent waiting in line, on the phone, or mailing a payment can be put to better use, such as managing our business operations and being productive in our daily lives.
So, naturally, the risks, associated with such unprecedented developments in a short span, also grew.
According to a recent report by McKinsey, global payments revenue will be at roughly 2.5 trillion dollars by 2025, an estimated 33% increase from 2021. This is good news for everyone, especially FinTech companies.
However, not far from the digital payments boom, are scammers, using sophisticated methods to rip off companies and victims of identity theft.
Beware: Bad Actors Are Everywhere
The acceleration of the digital payments ecosystem has created an interesting but attainable challenge for many bad actors to exploit vulnerabilities in digital services, specifically FinTechs and third-party payment providers, leading to hundreds of thousands of dollars in lost revenue and fines.
This also impacts consumers.
The Federal Trade Commission also reports that American consumers incurred losses totalling $5.8 billion to fraud last year, an increase of more than 70% from $3.4 billion in 2020.
Because most people around the world are now using digital payments for various services and goods, scammers and their techniques have become far more sophisticated, beyond the love letter that ends up in a spam folder from a prince or a telephone call asking grandma for money.
Hackers are using sophisticated means on social media (assuming the identity of friends and loved ones to lure in consumers who fell for phishing schemes) to obtain payments, credentials, and other sensitive information to exploit users.
Compliance Checks Are Critical
Many companies utilize various verification processes to confirm identities. And many leverage features such as the W8/W9 collection from Tipalti in their onboarding processes.
In addition to their W8/W9 collection process, some also use Compliancely, an identity platform that dynamically validates and verifies specific information in real-time through credible, official sources of data from federal and state governments.
All the real-time identity verification checks on Compliancely can be integrated with a platform, website, or app through an intuitive and easy-to-implement API infrastructure, which allows Enterprises to build hands-off and automated digital account opening and onboarding processes.
As fraudsters continue to use more sophisticated phishing scams and bots to create accounts with false or stolen information, Compliancely’s real-time TIN matching API helps eliminate those fake accounts by bridging the gaps in TIN discrepancies.
The Bulk TIN Matching service makes it easy for companies to add businesses and individuals to their master files by verifying thousands of TINs at once.
These checks can prevent losses, penalties, and B-notices from the IRS due to inaccurate information being reported on information returns, such as 1099s.
In addition to IRS TIN Check verification, Compliancely further enables customers to identify, validate, and verify individuals and businesses through other regulatory checks, including:
- Office of Foreign Assets Control (OFAC)
- Death Master File (DMF) checks
- IRS Tax-Exempt Status Search
- Secretary of State (SOS) Business Entity Search
- KYC and KYB Global checks from 32 countries and counting
Information obtained from these identity checks allows businesses to get all of the regulatory information they need right from the source.
Each time the data is provided for verification, Compliancely checks directly with the original source, giving users the most accurate, latest information.
Enterprises are able to verify individuals and businesses beyond the typical background insights that many competitors in data verification provide.
With Compliancely, companies can accelerate vendor profile verification and streamline KYC and KYB experiences through its comprehensive verification checks. Enterprises using Compliancely see extreme reductions in latency times between account creation and verification, along with increasingly improving match rates.
Zenwork is a Gold Sponsor for Tipalti Illuminate 2022
We are proud to be a Gold Sponsor for Tipalti’s Illuminate 2022 Conference with virtual and in-person events in San Francisco and London from September 13-15th. On September 15th, Zenwork will have a booth at The Pearl in San Francisco, CA to answer questions about filing Form 1099-K and also how Tax1099’s API can make your company’s filing processes automated, streamlined, and efficient. Our innovative features include secure form filing, sending eMail copies, USPS mailing, tax-exempt checks, real-time TIN checks, and more.
Backed by Spectrum Equity, Zenwork, Inc. is a fast-growing digital tax compliance and regulatory reporting technology company, with 10+ years of experience in powering businesses with electronic tax filings and compliance checks. The company currently serves over 150,000 customers nationwide, including 30,000 CPA firms, as well as enterprise customers. Zenwork has multiple compliance products under its umbrella, including Tax1099, Compliancely, EZ2290, and others.
Learn more about Zenwork at www.zenwork.com.
Tipalti comes from the Hebrew expression for “We handled it.” Tipalti is the only company handling both Global Partner Payments and Accounts Payable workflows for high-velocity companies across the entire financial operations cycle: onboarding and managing global suppliers, instituting procurement controls, streamlining invoice processing and approvals, executing payments around the world, and reconciling payables data across a multi-subsidiary finance organization. Tipalti enables high-growth companies to scale quickly by making payables strategic with operational, compliance, and financial controls. Companies can efficiently and securely pay thousands of partners and suppliers in 196 countries within minutes. Thousands of companies, such as Amazon Twitch, GoDaddy, Roku, WordPress, and ZipRecruiter use Tipalti to reduce operational workload by 80% and accelerate the financial close by 25% while improving partner visibility and strengthening financial and spend controls. For more information, visit tipalti.com.