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Ecommerce growth leads to increased demand for digital credit contracts

Tuesday 13 March 2018 | 11:28 AM CET

IDnow is offering its eSign solution to online retailers to let users conclude digital credit contracts, an application that requires an online video identification and e-contract signing.

This allows customers to legally conclude the loan agreement online in just a few minutes.

The German Trade Association has predicted that in 2018 the online trade will see a growth of 10%. An increasing number of online customers want to finance their purchases by credit.

The survey from the German Trade Association reveals that in the case of payment behaviour in online trade the proportion of financing or payment by instalments has, in the meantime, reached 4.5%.

The demand during the Christmas shopping season is particularly high. Anyone who doesn't want to lose their customers to the competition must reach to them with digital financing offers.

Online customers expect a quick and comfortable service with regard to credit. A digital solution for granting credit requires amongst others a legally binding identification and contract signing by the customer.

In light of the complex regulatory and technical requirements for a corresponding application, an increasing number of online retailers and financing providers, such as CreditPlus Bank specialising in consumer credits, are using the IDnow’s solution eSign.

With eSign, IDnow can offer its ecommerce partners this service as a mobile solution which can be incorporated into the online shop system. This simplifies the credit process for all participants and minimises the dropout rate on the final customer side.

With the solution offered by the identification expert IDnow, the credit application can be signed in just a few minutes whilst buying in the online shop.

To do so, the user must get identified by video chat before he agrees to the contract with a so-called Qualified Electronic Signature (QES). The signature via IDnow eSign thereby meets the security standards, as well as all legal requirements, and is as legally binding as a handwritten signature.

The issuing of the required certificate is done by a so-called Trust Service Provider (TSP). After signing the contract, the dealer immediately receives the information and can process the order. In this way, with a digital financing service, online retailers cannot only optimise the checkout process but also increase their customer loyalty in the long run.