April – payment and embedded finance solutions
Improving the identity verification pass rate for genuine customers
Contribution
Timeline
My Role
Tools
Solo project
2 weeks
UX Researcher, UX and UI Designer
Overview.
April is a payment company that offers merchants a comprehensive checkout solution. This solution includes a white labelled Buy Now, Pay Later (BNPL) service integrated into the checkout, providing users with a seamless checkout experience without the need for redirecting to a third-party website. To grant customers with a BNPL plan, our company performs a credit check on each new user by conducting an identity verification check, known as Know Your Customer (KYC) to assess their creditworthiness before offering financing. However, many users were failing KYC due to entering the wrong licence details.
What was the problem?
Our Customer Support (CS) team received many inquiries from users struggling with identity verification when setting up a BNPL plan. When the CS team investigated this matter, it was found that many were a result of entering the wrong card number.
What did the data show?
To understand the severity of the problem and to determine whether it was worth prioritising, I needed to understand how many users faced this problem and the impact on the business. However, as a startup without any product data report, the first challenge arose. So, with determination, I decided to manually collect and record one month of data from the third-party portal used for identity verification. Though this was a time-consuming task, this effort was crucial for measuring the impact and for comparing the data to evaluate the effectiveness of the redesigned solution. Here's what the one month of data showed:
Failure rate across the total number of attempts (21 June - 21 July)
2,799
total number of sign-up attempts
1,185
of those were failed attempts
42.3%
failure rate as a result
The total number of sign-up attempts involved 1,626 unique users, some of whom either passed on the first attempt or made multiple attempts before passing or failing the identity verification. The users who couldn't pass verification and thus couldn't create a BNPL plan constituted 21.8% of the unique users, which translates to 1 in every 5 users.
1 in 5
couldn't create a BNPL plan
Upon examining the reason for failures, it was clear that the 'wrong card number' was the primary contributor to the failure rate, making up 58.1% of the total failures.
58.1%
of users failed due to entering the wrong card number
Reason for failure
What response were users entering into the card number field?
The gathered data indicates that 54% of users who entered the wrong card number were way off the mark. Users appeared unsure about the required information, forcing them to make guesses such as entering '0000', their date of birth, or phrases like 'I don't know'.
Furthermore, 33.9% of users duplicated their responses by entering their license number in the card number field.
The remaining 11.2% of failures were due to simple errors like mistyping a single number or adding spaces between numbers. Excluding accidental mistakes, the failure rate caused by the lack of understanding of the card number amounted to 87.9%.
87.9%
had a lack of understanding of a card number
What caused this lack of understanding?
I first needed to understand why users were entering the wrong card number. Before my research, I had an assumption that all licence and card numbers would be clearly labeled, but I was surprised to discover that these numbers were situated on different locations on the licence by each state, often without clear labelling. I learned that it was only recently that the card number became mandatory for identity verification for matching in Document Verification Services (DVS) due to widespread data breaches impacting Australians. Consequently, many users failed verification despite being genuine customers because they were unsure about the required information.
Users need guidance on entering the required licence information to effortlessly pass identity verification.
How might we guide users to help increase the verification pass rate?
I proceeded to sketch some ideas and conducted competitor research to learn what other leading companies in the industry were doing. Here are a few of the ideas that came up:
Idea 1
Upload or take a photo of the license to detect the licence and card number which auto-populates the numbers into the input fields.
Idea 2
A help link that opens a page displaying licenses from different states, and indicates the location of the card number.
Idea 3
A tooltip that displays a sample license when hovered or tapped, ensuring a clean UI accessible only to users seeking assistance.
Idea 4
When the input field is clicked, a sample license indicating the location of the card number appears.
Prototype & testing.
The top ideas selected were ideas 3 and 4, as they provided easy access to the information without requiring much effort by the user. I then turned these ideas into a mid-fidelity prototype for preference testing. The preference test with 25 users revealed that users preferred having the sample licence appear when clicking into the input field, instead of having to click on a tooltip to reveal it. When asked 'why?', most users liked that it required no effort for those who didn't understand the required information, whilst it provided reassurance for users who already knew the required information.
Idea 3
Idea 4
UI elements.
Following testing and validation, I created sample licence images for each state, indicating the location of the licence and card number.
Solution
High fidelity design.
Check out using BNPL
Select Buy now, pay later as the payment method, and select a payment plan.
One Time Password (OTP)
Verify your mobile and email address. This allows you to log into your BNPL account in the future using OTP verification without having to create a log-in. If your information is recognised as an existing user who has verified identity, you are taken directly to the payment input step.
Verify your identity
If your details are unrecognised, we take you through the identity verification process.
Click on the document type and select driver's licence from the drop down menu. Then select your state.
Driver's licence number
Click on the licence number field, then the sample licence for the selected state will appear to help users locate this information.
Card number
Click on the card number field, and the sample licence will update to indicate the location of the card number on the licence.
Achievements
The solution wasn't shipped before I left the company, but it was crucial to have product data reporting for monitoring its performance once it was shipped. To avoid the team investing excessive time and resources into manual data collection again, I collaborated with a Customer Service representative who manages the relationship with our third-party KYC service provider. Together, we arranged to receive the product data via an API. Initially, the provider could only provide a basic report with pass and fail rates, lacking detailed failure reasons. Unfortunately, this information didn't offer much value. I emphasized the importance of detailed data reporting, which prompted the provider to enhance their product and deliver more detailed data via API. Following this, I collaborated with our Data Analytics team to create an automated product report, which is currently underway.
Challenges
The challenge I encountered in the project revolved around finding a balance between the expectations of different stakeholders. On one side, the CS team expressed a strong desire for the inclusion of a 'live chat' help link for users encountering difficulties with identity verification. Conversely, the Project Manager emphasised the need for a scalable solution that could accommodate future growth. Navigating these conflicting perspectives required careful consideration and negotiation to develop a solution that satisfied both the immediate needs of the CS team and the long-term scalability goals set by the project manager.
Thanks for reading!
I would greatly value your feedback. If you have any questions or feedback regarding my work, please feel free to reach out to me via email at julieyang.sydney@gmail.com