Online retail is growing continuously – and with it the risk for companies of falling victim to fraud and payment defaults. Fraud is particularly common in direct debit transactions, because account holders can dispute debits long after the transaction. Fraud in direct debit payments is a nuisance in many sectors, from classic online shopping to mobility services and events.
One example of massive payment fraud that is increasingly being mentioned in the media is the transport sector, where the number of fraud cases has increased significantly, especially since the introduction of the Deutschland-Ticket. Some examples show how significant the effects can be: At the Rhein-Main-Verkehrsverbund, 12 per cent of bookings were made with false account details within a month, while the Dresdner Verkehrsbetriebe reported 15,000 chargebacks due to fraudulent online transactions and a loss of 1.4 million euros in spring 2024. The Stuttgart Transport and Tariff Association was also affected by high losses due to fraud, with a six-digit euro amount.
Companies can protect themselves against payment fraud in direct debit transactions by verifying suspicious transactions before the sale is completed. Find out how this works and how Deutsche Bahn, for example, successfully reduces fraud and payment defaults here.
Verimi Ident-Check for the verification of transactions
Using identification procedures as part of the Verimi Ident-Check is one of the best ways for companies to protect themselves against fraud and payment defaults in direct debit payments. The focus here is less on the comprehensive identification of your customers and more on a comparison of whether the data provided during the order matches the data that can be confirmed as part of the Ident-Check. Companies decide for themselves which direct debit transactions should be verified: These can be all transactions, randomly selected transactions or transactions selected according to the company’s individual business rules. The selection decision can be based on several orders on the same day, defined shopping baskets or shopping basket values, for example. If a transaction is selected for verification, the customer chooses one of the offered identification procedures to confirm their payment. If the check is successful or unsuccessful, the partner company receives the result in the form of a ‘Yes’ or ‘No’ response from Verimi and can then communicate the next steps to the customer – specifically, whether the transaction was successful or rejected.
The Verimi Ident Check protects your company with 4 identification procedures
Verimi offers four proven methods from a wide range of possible identification methods that can be used quickly and cost-effectively to prevent fraud in direct debit payments:
The bank identification procedure confirms whether the customer actually has access to the account details provided by them at the checkout for payment by direct debit. This works very simply and without the need for an ID document, as your customers log in to their online banking.
With the user-friendly photo ident procedure, your customers’ identity is simply confirmed by means of photos of their ID document and a selfie.
The eID identification procedure is based on the online ID function of the German identity card and is particularly easy for customers who have already used the procedure and are familiar with it.
The Wallet-Ident procedure is the simplest, because here customers access the data that they have already verified and stored in their Verimi ID Wallet. They can therefore use their already verified data quickly and easily for verification, thus avoiding a more time-consuming identity check.
With the Verimi Ident-Check, your customers can decide for themselves which procedure they would like to use. It is important to offer alternatives in order to ensure fewer process cancellations and higher conversion rates. The Ident-Check is very cost-effective for partners – in the end, a simple confirmation is transmitted at the end of the process in the form of ‘Yes’ or ‘No’, and no onboarding data records, voucher data, etc. are generated for the partner. This means that, with the acceptance of relevant volumes, the magic limit of 50 cents per check transaction is significantly undercut!
Payment fraud at Deutsche Bahn massively reduced with the Verimi Ident-Check
In addition to other Verimi partners, Deutsche Bahn, for example, also uses the Verimi Ident-Check in its ticket shop, for Deutschland-Ticket and for monthly and annual tickets to curb the misuse of direct debit payments. Anyone who buys a ticket online or via the app can now increasingly verify their transaction using the Bank-Ident, Foto-Ident, eID-Ident or Wallet-Ident procedure. Deutsche Bahn initially offers its customers a choice between procedures with online banking (Bank-Ident) and without online banking (eID-Ident, Foto-Ident). Verimi Wallet-Ident cannot be actively selected, but is automatically offered to those customers who are recognised by Verimi based on their email addresses. The structure of the selection menu is always individually selected by the Verimi partner, in this case Deutsche Bahn, and can vary depending on the requirements and application. After Verimi has checked whether the order data matches the identification, the result is transmitted to Deutsche Bahn as a simple ‘Yes’ or ‘No’, which then continues the process and communication with the customer.
The Verimi Ident-Check at Deutsche Bahn has significantly reduced cases of fraud in direct debit payments and is very well accepted by users.
The strong defence against fraud at Deutsche Bahn has also led to an increase in attempted fraud at other providers – especially with regard to the Deutschland-Ticket, which is available at many sales outlets throughout Germany. That is why it makes sense for all transport companies to protect themselves against fraud. Companies in other sectors that accept payment by direct debit should also familiarise themselves with the advantages of the Verimi Ident-Check.
We will show you step by step exactly what Deutsche Bahn customers go through during the verification process using the example of the bank identification procedure in our free webinar (minute 11:50).
About the webinar: ID check methods for direct debits
We would be happy to advise you personally on how you can best protect yourself against fraud and payment defaults while at the same time offering your customers a user-friendly shopping experience.
