Blog 29 Apr 2024
Biometric identity

Biometric Identity Verification and P2P Industry | A Systematic Approach To Secure Transactions

Author: admin | 29 Apr 2024

Imagine you took part in a crowdfunding activity held for animal welfare. Being a wildlife enthusiast, you passionately served the cause and donated 50000 US dollars to this funding pool whose marketing campaign slogan said “Be human to beings who cannot tell you about their pain!” Now that the crowdfunding pool reached its limit promising a free safari trip as a token of appreciation, You called the given contact number which was turned off. Upon suspicion you contacted authorities and they told you that you have been a victim of crowdfunding P2P fraud. 

Many such cases happen almost every month and are reported on news channels. It is due to the nature of anonymity and weak regulatory measures taken in activities like this. The P2P Industry offers multiple opportunities to the general public to raise funds and other financial objectives. However, there’s a high risk of different types of fraud and theft. 

A probable solution to prevent fraud in the Peer-to-peer industry can be using strong identity verification and authentication methods like biometrics. 

What is the P2P industry?

P2P stands for peer-2-peer which refers to direct interaction between two or more parties. It allows multiple businesses, parties, and individuals to send and receive payments, share information, and conduct business transactions without third-party approval or checks. Here are a few examples of P2P platforms:

P2P businesses under different Platforms are operating successfully.

Insights on P2P Industry Fraud

Despite the convenience and transparency that P2P businesses offer, the term is exploited by many fraudsters under different names and offers. Recent statistics by Forbes show alarming indications of increasing fraud through P2P businesses. The following tactics often work in deceiving people who are a part of the P2P Industry.

1. Account Takeover Fraud

Fraudsters may trick the users through a fake landing page or a phishing email and once the user clicks it, they take over the user’s account.

2. Identity Theft or Impersonation

It is one of the most common fraudulent practices in the P2P industry. People become victims of schemes or offers or even fake Money Service Platforms. Fraudsters may use fake accounts and identities by online impersonation or even steal some legitimate identity and use their credibility to steal money.

3. Crowdfunding Fraud

Another common fraudulent practice is where a charitable donation or a pool of investment attracts several investors or donors. Once the desired amount is collected, the fraudsters vanish away with all the money. Even if they’re tracked back they use money laundering tactics to wash their money and remove the trails of it.

Which Areas Are Exploited for Fraud in P2P Industries?

Peer-to-peer businesses are vulnerable to attacks as mentioned above mainly due to being of high value. Thousands of transactions occur in a single P2P setup where huge amounts of money are transacted every day. This makes this industry attractive for fraudsters and launderers to gain unauthorized access somehow and then steal the money. Following are the main characteristics of Peer-To-Peer businesses that are exploited for illicit gains.


  • Direct Interaction
Investors, wealthy businessmen & donors directly interact in P2P infrastructures. Here, there is little to no check on their activities or no proper security measures that can guarantee their online security. 
  • Absence of Intermediaries
Intermediaries have no direct role in operating a P2P setup except they have provided a platform that only connects people. This results in anonymity and fake profiling that causes social distrust and damage to businesses and people.
  • Decentralized Funding
One of the main reasons for P2P business’s exploitation for fraud is the decentralization of funds that has no central or directly regulated check and balance on transactions causing them to be vulnerable to hacking accounts, fraudulent offers, and being a part of money laundering activity.
  • Diverse Projects and Causes
Projects and funding causes are highly diverse in P2P businesses as this industry serves a variety of niches. Thus, the industry has a high number of genuine as well as fake projects and causes from which choosing the genuine one is challenging.

Key Trends of P2P Industry

Forbes report revealed that,

  • P2P transactions in 2026 are expected to reach US$ 2.3 trillion annually. 
  • In 12 months, nearly 8% of banking customers complained about a P2P scam.
  • The Median loss to customers due to Peer-To-Peer scams amounted to $175 per customer in 2022. The amount has increased ever since with the rise in the number of P2P scams.

How can Identity Verification Prevent Fraud in the P2P Industry?

Businesses offering peer-to-peer services require stringent measures to prevent and protect their customers. For this purpose verifying the customer identities is a critical aspect of creating flawless online P2P security systems. Let’s look into how the P2P industry can have a robust identity verification system.

1. Considering the Factor of Decentralization

Decentralized database and monitoring services such as blockchain-based identity solutions can be a best practice alongside educating end-users about their digital identity security through identity verification. Since every user has the option to directly interact with another user or peer, they can use blockchain-based and self-operated identity verification to prevent fraud and scams.

2. Biometric Identity Verification & MFA

The use of biometric identity verification with implementing multi-factor authentication (MFA) is highly effective. Once peers have gone through a biometric Identity proofing system there is very little chance of any peer getting spoofed or scammed.

How Face Verification Enhances Biometrics and P2P Identity Proofing?

Since online P2P domains mostly require interaction of users through video calling platforms, they can use third-party trusted and certified identity solutions. It can be done under the following considerations:

  • The identity solution must be scalable in terms that it can handle different business scopes in terms of verifying multiple identities and maintaining quality procedures.
  • The facial recognition solution must be integrated at the back end or infused into the video calling and other communication platforms in such a way that its overall working and communication process must not be disturbed. This calls for the facial verification system to be programmed to be fast, accurate, and consume fewer resources.
  • The most important part of implementing a facial recognition solution is the feature of a liveness check. 

Liveness Detection is a parametric approach that tests face liveness to confirm that,

  • An actual human is sitting in front of the recording device through an active liveness test.
  • The person is not using any spoofing technique such as a deepfake or facial morphing through a passive liveness check.

Read Also: Pedestrian Detection Through AI Facial Recognition

Why Facia is the Best Option for P2P Identity Proofing?

Facia is uniquely programmed on AI models to vigilantly detect identity spoofing attempts. It is a facial recognition solution that proves liveness in under 1 second in multiple settings. This helps P2P users in verifying identities at high speed minimizing the threat of fast-paced deepfake attacks. Facia is also proven to be highly accurate at a 0% False Acceptance Rate achieved.

Click below and witness how Facia brings liveness detection to life! 

Liveness Verification Under A Second | Facia 

Frequently Asked Questions

What is identity verification?

Identity Verification is a process of verifying user identities usually done for customer onboarding and online security purposes. It ensures that the people who are trying to access the services are genuine clients and users of that service.

Why is identity verification necessary in the P2P industry?

In the Peer-to-peer industry, the clients and customers interact directly with each other which increases the threat of online fraud and scams. So, to prevent it Identity Verification is critically important to protect customers from illicit activities.

How is identity verification conducted in P2P platforms?

Identity Verification in P2P platforms can be conducted mostly through biometrics. The P2P service providers can implement AI facial recognition to confirm the identities of all peers before onboarding them.

Why is identity verification important in P2P?

P2P businesses are vulnerable to fraud, theft, and forgery through the latest tactics in the online world. People can become victims of scams through fake investment offers or business deals. So, identity proofing is highly important to protect genuine peers and stop fraudulent people.

What are the challenges of identity verification in P2P?"

The element of anonymity offered in P2P and the user’s unawareness about the importance of identity verification is a challenge in streamlining customer onboarding and preventing P2P fraud. Also, the element of cost, efficiency, and accuracy of identity verification solutions can be a challenge in a constrained and restricted environment.

Categorized as Blog