Spam, fraud, and account takeovers (ATO) not only impact your customer experience negatively and increase churn but also hurt your brand. Verifying users’ identity during account registration and transactions can prevent spam, fraud and ATO.
Watch this slideshare to learn:
-Why phone number verification is critical for mobile and web apps
-What it takes to build a globally effective phone number verification solution
-How you can achieve higher conversion and keep costs under control.
It has become critical for online businesses to ensure that the people signing up for their services are legitimate users because of several potential problems.
Foremost of these, spam from fake accounts is a major problem especially for social networks, OTT messaging apps and other mobile and gaming apps. Spam includes contacting users with undesired content, excessive posting, link baiting, sending bulk messages among other activities. This severely sullies the user experience and if users start leaving the service, this can affect the monetization potential and valuation of the service. For instance, social networks are clamping down on fake accounts and spam as advertisers start complaining that this affects their Marketing ROI.
A second problem is fraud. Fraudulent listings are a particularly a problem for online marketplaces. For instance, fraudsters post fake listings of rentals on Craigslist and attempt to charge a deposit for it. Some marketplaces provide fraud insurance, which can have financial implications.
Similarly, hacked accounts and account takeovers can have a direct financial impact on businesses. For e.g., Hacked Netflix accounts are sold for $2 on some internet forums and Netflix loses out on potential subscription revenue from the buyers of these hacked accounts.
Handling fraud is expensive too. Even if the fraud is of a small amount it can result in financial overhead in terms of customer care, higher payment processing fees, and chargebacks.
Finally, users may enter invalid information when signing up or stop using email accounts that they used to sign up. In this case, it becomes difficult to reset their passwords, authenticate their transactions and convey critical information in general.
In order to provide an enhanced user experience, ensure high customer retention, prevent damage to their brand, online business, services, and mobile apps must verify their users.
Recently, Phone Numbers have emerged as the ultimate user identity. There are several reasons for this.
Phone numbers have the largest reach at 6 billion people across the world. Even the largest social network has about a billion users and is blocked in certain regions such as China. Further, people retain the same phone number for several years.
Using phone numbers for verification, allows sending passcode information out-of-band from the original application providing additional security compared to a social login or an email-based login. Further, getting phone numbers involves a user verification as they have to procure numbers from carriers. Phone numbers are difficult to fake, and the right service will detect VoIP or toll-free or premium numbers so that these cannot be used to create fake accounts.
Using services such as social logins create privacy concerns for users. They don’t want the app to get their personal information such as their likes or friends; at the same time they don’t want the social network to get information about all the apps that they are using.
For some businesses t owning user identity management is critical for monetization and they don’t want to outsource the user identity management to a third party service. Phone number verification allows them to retain ownership of user identities.
Finally, registration is the very first interaction of a user with the app or business, and it is critical for businesses to be able to control the user experience and branding at this stage rather than rely on someone else.
On the surface, phone number verification for registration looks very simple to implement. It just requires a few simple steps. The user enters their phone number in the app. The app then sends them a PIN code via SMS or voice. The user enters that PIN in the application. If the PIN is correct, the app knows that that phone number belongs to that user.
The user registration step is critical. You’ve already done all the hard work of getting the user to download the app or decide to sign up for your online service. Any users that get dropped at this stage result in lost potential revenue. So even though it may seem simple from the user’s perspective, there are multiple factors that need to be kept in mind to ensure that users complete the registration process.
First is the user experience. It must be designed to clearly indicate the verification steps to the user: what to expect and what they must do next.
Next, each phone number should be associated with only one user. This is to prevent creation of fake accounts which can lead to spam and fraud. The user may not get the PIN on the first attempt because of SMS deliverability issues, depending on where the user is, and I will get into this on the next slide. So it is critical to retry and use SMS or voice as failover mechanisms to send the PIN.
For security, the PIN must be only valid for a short duration in the range of a few minutes.
Users in different parts of the world have different preferences. Language, for instance, must be customized to local preferences to achieve high conversion.
And finally, it is critical to track and measure your conversion so that you know what is working and what needs to change.
Even if you adhere to these best practices, the communications channel is out of your control and will affect your conversion rates. The traditional communications channel was not built for business critical communications. First, numbering plans can be very confusing and determining whether to use voice or SMS to send the PIN for landline or mobile phones can be tough. Next, if you connect to an aggregator to send SMS globally, your messages will be subject to severe latency and deliverability penalties because of multiple hops that the messages go through. This not only reduces your conversion rate but also creates security risks because of the additional hops. Finally, each country and carrier has their own set of regulations that must be followed to ensure that messages get delivered.
With all these challenges, the average industry conversion rates are low at around 65%.This is especially true when looking a global user base. In order to improve your conversion you need to take several actions that are expensive in terms of time and resources.
First, you’ll need to build your own retry logic and collect metrics from multiple vendors. Next you’ll have to localize templates for each market (English may not provide the best user experience in every market), and build a way to detect landline/fixed numbers (no point in sending an SMS to a fixed number), and detect VoIP/Toll-free/Premium numbers to screen out fake accounts.
Second, the user experience and hence conversion will not be optimal unless you engage in a lengthy trial and error process to fine-tune your messages market by market e.g. language (in India to you send in Hindi or English?), template (do you start or end with the Pin?), Pin length and expiry (in some countries 6 digits convert better than 4), and channel SMS or Voice (because of confusing numbering plan in Argentina Voice drives higher conversion than SMS).
Third, your costs of operating and managing the solution will not only increase but also become more unpredictable. With low conversion rates, each retry attempt will increase the cost of conversion. Managing rates with multiple vendors costs and in different currencies makes it very difficult to predict your costs. You’ll need large teams in operation and product to go thru the complex learning curve involving heavy A/B testing. Understanding the regulations of each carrier in each country updating your DIY solution to incorporate those adds to the complexity and costs.
And, even if you do all of this, your conversion rate may still not reach the maximum achievable rate because all your data is biased. For e.g., you don’t have the visibility to benchmark your conversion rates with the average across multiple apps in a market and determine whether low conversion is specific to your app or endemic to a region.
Over the past 4 years, Nexmo has enabled over 70,000 customers including 80% of the world top OTT messaging apps such as Line, Viber, Snapchat, WeChat, and enterprises like Airbnb to acquire over 3 billion users using SMS & Voice in over 200 countries and regions. We’ve seen how complex the process is and improved our APIs to make it easier for our customers and improve the conversion rates of their apps.
This started with our conversion API that enabled us to gather real time data from users. Today over 500m data points are collected every month on what really works in terms of routes, localization, user experience, and conversion.
Then we built Adaptive Routing to pick the route with highest conversion in real time to maximize your conversion rates. And we built a large database of carrier regulations including information such as acceptable sender ids, filtering rules among other to guide our customers.
Nexmo Verify incorporates all the experience we have gained with acquiring 3 billion users and is built on top of our direct to carrier connections and adaptive routing to provide customers simplicity and the highest conversion.
Verify is extremely simple to implement. As simple as making an http request. All you need to do is send Verify a request with the user’s phone number. Verify takes care of generating the code, and sending the code to the user, with retries if necessary. Once you receive a code from the user simply send Verify the code to check whether it matches the one that was generated for them.
What is truly disruptive is how Verify hides complexities from you, to deliver the highest conversation at a low and predictable cost.
Verify takes care of:
- Number validation: making sure that VoIP numbers, Toll-Free numbers, and Premium numbers are rejected. You will not only prevent fake accounts and fraud but also not get charged for any requests from these numbers.
- Maxmimizing conversion by Abstracting Carrier regulations, so that your verification requests are compliant without any requirement on your part to updates messages Using the optimal workflow based on number type and location Failover to SMS or Voice and retries Localized templates & languages proven to improve user experience
Collecting and analyzing data to provide you visibility into performance
Verify’s revolutionary pay-per-conversion model ensures that our objectives are completely aligned with yours.
This is an example of how Verify applies best practices to give you the best conversion.
You send Verify the phone number of a user in Cyprus. Verify uses Voice as the primary channel to send the user a PIN. The sender ID is alphabetic and the language used is Turkish.
A second user may be in the United States. This time, Verify uses SMS as the primary channel and the sender ID is a phone no. or a short code and the language used is English.
There are several advantages to using Verify.
First you improve your customer acquisition as Verify gives you the highest conversion rates with its direct2carrier connections and adaptive routing, SMS/Voice retries and failover, localized templates, and carrier compliance.
Next, you get enhanced security by preventing fake accounts that cause spam and fraud. The PIN is delivered out of band with low latency and expires in a short time. The PIN is also generated according to the RFC6238 standard.
With pay per conversion and flat global pricing, your costs are predictable and low. You can analyze your costs and performance right from the dashboard.
Finally, you need zero telco or 2FA experience to give your app global reach in an instant. You can verify landline numbers or mobile numbers or both landline and mobile numbers globally.
Phone Number Verification Done Right
Phone Number Verification Done Right
Verifying Users Has Become
Necessary for Mobile/Web Apps
Spam Attacks By Bots
e.g., Unwanted messages, link baiting
Fraud & Account Takeovers
e.g., Fake listings, hacked accounts
e.g., Incorrect or stale user information
Not Verifying Users Negatively Impacts Your Customer Retention And Your Brand
Verify users are
Verify users are who
they claim to be
Phone Numbers Are The Ultimate User Identity
• 6 billion people
• Global reach
• Control over UX
• Control over Brand
• Not easy to fake
• Customer list
• User info privacy
How Phone Number Verification Works
User enters their
phone number into the
User receives a
User enters PIN
code into app
Phone Verification Best Practices
Per Phone Number
Short Duration For
Code Validity (Minutes)
Customize to Local
Track & Analyze
The Carrier Network Is Not Fit for
Phone Number Verification
Latency & Deliverability
Security Exposure with
Each Additional Hop
With Traditional Industry Conversion of 65%,
It Is Complicated to Get It Right
Each app is biased by its own data leading to increased inefficiencies
› Multi-vendors needed
› Retry logic to build
› Routing & Analytics
› Localization needed
› Fixed vs. Mobile
A/B Testing on :
› PIN length
› PIN Expiry
› SMS or Voice
› Pay Per Attempt
› Complex multi-vendor
› Payables/FX implications
Procurement teams to
manage cost/quality across
hundreds of networks
Total Cost of
Phone Number Verification Done Right
Built on Nexmo’s direct to carrier connections, adaptive routing
technology, and experience with verifying over 3 billion phone
Verify Phone Numbers Anywhere
Simply send Nexmo Verify a phone number and then validate the user entered code
Verify takes care of delivering the code and optimizing multiple parameters to maximize your conversion
of Messaging Apps
in 235 countries &
How Verify Works
Verification Request attempt
User enters PIN
We’ve just texted a code to
+1 (847) 555-0150
End User receives PIN
by SMS or Voice
Under The Hood: Verify Eliminates Complexity
Reject VoIP, Toll-free and
Pay Per Conversion
Maximize Conversion of Valid Numbers
Data & Analytics
Verify Applies Best Practices On Your Behalf
Example of Two Users
Application Verify Automatic Conversion
Person 2 In United States
Person 1 In Cyprus
• Primary Channel: TTS
• Sender ID: Alphabetical Sender
• Language: Turkish
• Primary Channel: SMS
• Sender ID: Phone Number
• Language: English
Business Impact From Using Verify
Zero Telco or 2FA
Simple API integration
Fixed & mobile numbers
Pay Per Conversion
Flat global pricing –
no rate cards to manage
Dashboard to analyze
costs and performance
Highest deliverability with
SMS or voice selection
and seamless failover
Customization to local
Spam and fraud
Low latency PIN delivery
and time based expiry
RFC6238 compliant PIN
OTTs & GAMING APPs:
Problem: Spam, Scam, ATO
Solution: Prevent fake accounts
used to create spam by verifying
TRAVEL, TRANSPORT &
Problem: Unreachable users
Solution: Ensure that you can
alert or notify customers by
BANKING & PAYMENTS:
Problem: Fraudulent Transactions
Solution: Authenticate all
transactions with a One Time
Password to prevent fraud.
Problem: Fraud, ATO
Solution: Verify users on
registration, password resets,
and suspicious transactions.
Case Study: Streamlining Sign-on to Public
Wi-Fi with Nexmo’s Verify API
• Registration via email yielded
only 30% conversion.
• Using SMS boosted conversions
• Social Zone wanted higher conversion
rate and higher quality information
for customers subscribing to its
• With Nexmo Verify, Social Zone boosts
conversion rates to near 85%.
• Improved user experience boosts brand image.
• Social Zone integrated the
Nexmo Verify API into its
• Verify relies on both SMS
and text-to-speech services
from Nexmo to increase the
likelihood that recipients
will received crucial
Case Study: Verifying New Users
Around the World with Ease
• pq needed to be able to authenticate
app users anywhere in the world
quickly and reliably.
• pq was to be featured on the Apple
App Store, so it needed a solution it
could integrate quickly.
• Five verification solution providers
had already failed pq’s quality tests.
• pq integrated Nexmo Verify with its sign-on system in only one hour.
• A pq app ready for worldwide user authentication was on the App Store in a matter of days.
• With Verify, subscriber conversion rate is above 80%.
• Verify complements pq’s focus on the customer experience, boosting brand satisfaction among users.
• pq integrated its sign-on system
with the Nexmo Verify.
• Verify relies on both SMS and
text-to-speech services from
Nexmo to increase the
likelihood that recipients will
received crucial verification
codes quickly and reliably,
regardless of where they are in
Case Study: Stopping Scams at the
Door of Love
• 30% of new site registrants were
from spammers and scammers.
• Registration via email proved
• DatesOfAsia personnel lost
valuable hours each week
rooting out scammers.
• 94% global conversion rate with Nexmo Verify.
• Spammer and scammer registrations eliminated.
• DatesOfAsia personnel can now focus on improving the experience of legitimate community members.
• DatesOfAsia was able to integrate and fully test Verify in just 10 hours–with no prior Nexmo experience.
• DatesOfAsia had been
planning to construct its own
SMS-based user authentication
• When it discovered Nexmo
Verify it recognized that
integrating Verify would be
even more effective and far
less costly in both the short
and long terms.
Case Study: Nexmo Verify Instills Confidence
in the Integrity of the Folr App & Community
• Allowing others to track your
whereabouts demands absolute trust
in the authenticity of the other users.
• Email authentication is too easily
spoofed to ensure customer
confidence in other Folr member
• Authentication needed to be quick
to integrate, global in scope, and
easy to manage.
• Nexmo Verify creates the confidence that Folr users require to embrace the solution.
• Verify PINs act as account passwords, ensuring that only verified users can access their accounts,
and only using registered devices.
• Verify’s global focus makes it easy for Folr users to have their devices and identities validated anywhere in the world.
• Folr integrated the Nexmo
Verify solution into its
mobile app infrastructure.
• Verify matches users
to specific devices.
• One-time use PINs from
Verify function as passwords
to unlock the Folr app on a