Sharing Economy & the Need for Identity Verification

The relatively new sharing economy phenomenon, also known as peer-to-peer-based sharing, has revolutionized business models worldwide. But what it is, and why does it need robust identity verification?

Sharing economy refers to the economic system in which products and services are shared between private individuals.It has grown in recent years, with many analysts expecting this market to continue booming, with technology being the most significant driver behind its progression.

Businesses were able to broaden their reach in terms of targeted audiences through digitalization, particularly P2P platforms. Accordingly, many customers prefer the concept of shared businesses as it enables them to access services on-demand.

The global COVID-19 pandemic also has prompted users to turn to sharing economy as it is a safer alternative that allows them to partake in certain activities while following various safety protocols.

But with more and more users interested in sharing economy sites, it has become a target for criminals for committing fraudulent activities.They can do this by instigating data breaches then stealing confidential information to sell on the dark web.

P2P companies must have strong online identity verification solutions to prevent unauthorized access and illegal disclosure of confidential data. For sure, sharing economy sites have identity verification and background checks in place for their users. But there is a lack of uniformity in procedures across providers.

A more secure authentication measure can help both contractors and customers feel safe while partaking in the sharing economy. Additionally, it can prevent financial losses, customer distrust, and other costs. All of which can provide a seamless user experience and improve customer retention strategies.

Trust is paramount in the collaborative economy. That is why P2P businesses must replace conventional identity authentication methods with modern and efficient solutions like supplementing knowledge-based authentication with biometric authentication.

Here is an infographic from AuthID that discusses sharing economy and the need for identity verification.