Quick commerce players are increasingly engaging with identity verification firms such as IDfy, Bureau and Equal to conduct background checks on delivery personnel, aiming to enhance trust and curb frauds amid rapid expansion of the instant delivery ecosystem.

While gig economy workers have always been required to submit identity documents before joining a platform, companies like Swiggy, Zepto, Blinkit and Zomato are increasingly engaging ID verification firms to use advanced technology to authenticate these documents and evaluate applicants’ behavioural patterns during their assignments.

“We are seeing the emergence of trust as a competitive differentiator (as) institutional investors are increasingly factoring robust identity verification frameworks into their due diligence processes,” said Keshav Reddy, founder of identity verification platform Equal. “Overall, we are seeing brands looking at these functions as a strategic asset rather than a cost centre.”

Hyderabad-based Equal is in conversation with multiple ecommerce firms on deployment of such solutions.

Stricter checks

A prospective delivery personnel needs to scan a QR code at an enrolment centre, click a selfie, submit identity documents and submit details of his or her two-wheeler registration for real time vetting.

Machine learning models are used to match the details provided by the applicant with a government database and match the selfie with the image in the identity card as part of a detailed verification process.

Additionally, multiple government databases are scoured to create a social score of the applicant, on the basis of which the application is processed.

Industry insiders said that while more than 90% of the applications go through without any red flags, around 10% cases are put under further checks and a further smaller percentage of applicants are debarred from joining the platforms.

Use of ML tech

“The industry is increasingly adopting machine learning models to help businesses evaluate identity documents; they are also investing in advanced technology to detect face-matching and voice-based fraud as well,” said Ranjan R Reddy, chief executive officer of Bureau, which provides fraud and identity verification solutions for businesses.

Startups like Bureau and IDfy count banking and financial services as their major clients, but now ecommerce and quick commerce firms are contributing a significant share to their business – ranging from 15% to 30%. Out of 150 firms that Bureau works with, nearly 40 are in the online commerce sector.

The proliferation of dark stores across large cities has meant that these fraud checks have to be deployed at multiple centres and not in one enrolment centre or large warehouse only, industry insiders said.

On a single day, there have been instances where a dark store witnessed collusion fraud worth over Rs 8 crore, putting viability of such dark stores at times in question, Reddy of Bureau added.

Such instances have forced quick-commerce firms to take background verifications very seriously.

Mumbai-based IDfy gets around 15% to 20% of its business from ecommerce firms even while a major part of the clientele is financial services firms.

“There is a reputation risk for brands, so they want to be careful about who they hire as the sector gets organised,” said Wriju Ray, chief business officer of IDfy. “Also, with technology available for instant checks, there is a higher degree of intent among these firms to deploy these solutions at their enrollment centres.”

Identity verification firms’ main business comes from undertaking KYC (know your customer) formalities for banks, but the demand for background checks from non-financial sectors is growing.

To be sure, the parameters of qualification for a food delivery platform will be very different from that of a loan disbursal company. So, the scoring methodology depends on the firms they are servicing, but the core underwriting principles remain the same, identity verification professionals said.