The Cost of Friction: Why Seamless Onboarding is a Competitive Advantage

First Impressions Are Everything

You never get a second chance at a first impression — and nowhere is that truer than in customer onboarding. Whether a shopper is standing at a retail counter or clicking through a checkout flow at midnight, the experience of becoming a customer sets the tone for the entire relationship. Get it right, and you earn loyalty. Get it wrong — make it slow, confusing, or error-prone — and you may not get another chance.

The numbers are sobering. Baymard Institute research puts the average online cart abandonment rate at nearly 70%, with lengthy or complicated checkout processes consistently among the top reasons customers bail. In physical retail, the stakes are just as high: cumbersome processes create long lines and bad experiences that send customers out the door and straight to a competitor.

The message is clear: friction kills conversions. And as the bar for customer experience continues to rise, businesses that fail to streamline onboarding are leaving serious revenue on the table.

The Need for Identity Verification

Many transactions have a simple checkout. But a growing category of purchases requires identity verification (IDV) — moments when a business must confirm not just that a customer wants to buy, but that they are who they say they are.

Two common examples illustrate the challenge:

Applying for a retail credit card at the point of sale.

A cashier offers 20% off if the customer applies for the store card. What sounds simple requires an IDV and the collection of a full name, address, date of birth, Social Security Number, and income — often typed manually into a terminal. The process is slow, error-prone, and awkward at a busy register. Online, customers face the same wall of form fields, and many abandon the application before finishing.

Buying a phone on a financing plan or BNPL agreement.

Signing up for a new phone service with a financed device, or using Buy Now, Pay Later (BNPL) services for purchases, requires a credit check, a service agreement, and identity verification. These aren't optional formalities — they are regulatory necessities. A misspelled name or transposed address can cause an eligible customer's application to fail, costing the business a sale it had already earned.

In both scenarios, the need for accuracy and speed is paramount. Errors in identity data don't just slow things down — they can result in fraud, failed credit checks, compliance violations, and downstream customer service headaches. The business, its existing customers, and the applicants all have a stake in getting it right.

The Real Risks: Fraud, False Declines, and Lost Customers

Poor onboarding creates risk on two fronts:

The first is fraud. Synthetic identity fraud, where bad actors combine real and fabricated data to create fictitious identities, costs U.S. businesses an estimated $20 billion annually, according to the Federal Reserve. When a criminal opens a fraudulent credit account or initiates a fake BNPL purchase, the harm extends to existing customers too — damaged credit, fraudulent charges, and the burden of disputing accounts they never opened.

Using genuine DMV data for fraud has never been easier. The dark web has become flooded with authentic driver's license information as a result of massive data breaches, including the 2024 United Health/Change Healthcare attack affecting over 100 million Americans, the National Public Data breach, and incidents at insurers like Lemonade and numerous other institutions. Unlike credit cards, which banks cancel and reissue within days of a reported compromise, driver's license numbers have no equivalent rapid-response system. Almost no one contacts their state DMV after a breach to request a new license number. This means stolen driver's license data can remain valid and exploitable for years, making it one of the most durable tools available to identity thieves.

The second risk is equally costly but far less discussed: false declines, also known as false positives. A false decline occurs when a legitimate customer is flagged as suspicious and denied a transaction that they had every right to complete. It's the equivalent of a bouncer turning away a paying guest because their ID "looked funny."

According to a recent PYMNTS Intelligence "Orchestrating Trust" report, 47% of merchants say false declines have directly cost them sales, with nearly half estimating that up to 5% of legitimate orders are incorrectly rejected — representing an estimated $50 billion in lost revenue industrywide. The customer damage is lasting: research shows that roughly one in three shoppers will never return to a merchant after being falsely declined.

Intellicheck: Accurate, Frictionless Customer Experience — In-Store and Online

The same PYMNTS research showed that 85% of merchants say their top fraud challenge is preventing fraud without degrading customer experience. This is exactly the problem Intellicheck was created to solve. Intellicheck's Identity Verification Service provides quick, accurate IDV seamlessly integrated into both in-person and digital onboarding experiences — without the friction that turns customers away.

At the core of Intellicheck's technology is the ability to analyze and extract authoritative data from the barcodes on North American DMV-issued IDs. Counterfeit IDs cannot accurately replicate this hidden authoritative data. Additionally, these barcodes contain a wealth of precisely formatted, highly accurate identity information that can be used to automatically fill out onboarding forms. Accurate identity verification, minimal false positives, and quickly filled forms are truly transformative.

No typing. No typos. No delays. Intellicheck validates the authoritative data directly from the ID barcode and fills the form for you — the legitimate customer only needs to confirm it's correct.

The Bottom Line

Customer patience is a scarce commodity. Businesses that make onboarding new accounts easy will win. Those who approve fraudsters, upset genuine customers, and create obstacles during high-intent moments will watch customers walk away.

With Intellicheck, frictionless doesn't mean less secure. Businesses get fast, professional customer experience with rigorous identity verification that protects the business, safeguards existing customers, and satisfies compliance obligations — whether the customer is at a checkout counter or on a website.

Contact us to learn how Intellicheck can ensure your checkout experience is accurate, speedy, and a pleasurable start to a new customer relationship.

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