With the rapid increase in online financial transactions, preventing money laundering, terrorist financing, and other financial crimes has become a hot-button issue worldwide.
All financial firms must follow their country’s regulatory requirements when onboarding new customers or transacting with counterparties. This is part of an overall strategy to reduce fraudulent activity.
To that end, many governments have mandated that financial institutions take extra steps to ensure that customer identification is completely foolproof. Biometric KYC verification is the new gold standard for customer verification.
However, it isn’t just financial institutions that have implemented this new customer verification method. PetsForHomes, a Sydney-based pet classified advertising website, has announced that they have launched a KYC verification tool for breeders.
What is KYC, and how does it work?
Know your customer (KYC) is a commonly used term in the financial sector, referring to the process of identifying a customer’s identity when transacting with them.
Banks, cryptocurrency exchanges, and digital payment service providers must go through this process with a customer before giving full access to their services.
This goal is to assist authorities and businesses in tracking customer activity and detecting fraudulent customers before they can complete any illegal transactions.
Is biometric KYC necessary?
If you’ve recently transacted with any financial institution, you’ve likely already gone through KYC verification. Your bank has likely been practicing manual KYC verification, which can be time-consuming.
A digital biometric system for KYC reduces the time and effort required, allowing for real-time onboarding and verification in many cases.
KYC means safer transactions for PetsForHomes breeders and buyers
Online pet marketplaces typically require little to no verification during account creation. Technically no financial transactions are occurring on the sites themselves, so they are not beholden to the same regulations that other businesses must follow.
However, all that means is that it is much easier for fraudulent accounts to prey on legitimate breeders and buyers.
When looking up a breeder, you must research whether they’re reputable and legitimate. All of that can be circumvented if the fraudulent account is spoofing the information of a legitimate breeder, which can easily be found online.
It’s not only buyers who suffer when fraudulent breeders have listings on these marketplaces. Actual legitimate breeders can ruin their reputations if a scammer uses their information to trick buyers into depositing a puppy.
Once the money is in their bank account, the scammer can quickly disappear. The buyer has then lost their deposit, which can be in the thousands of dollars, and the honest breeder now has to explain that they were never involved in the transaction.
Breeders who have joined the PetsForHomes online pet marketplace have the option to use the biometric KYC verification tool and will get a Breeder Verification Badge once they pass. PetsForHomes buyers can be sure that any breeder with the Breeder Verification Badge has verified their identity.
According to PR Manager Kate Teng, accountability for breeders was the main goal behind the founding of PetsForHomes. She added, “Implementing KYC verification is another step toward that goal. Our hope is that puppy farms and identity thieves will no longer be able to hide from the pet community and will finally be stamped out.”
It remains to be seen whether other online pet marketplaces will follow suit, but using KYC verification could be a game-changer for pet breeders and buyers.