News
28/05/2019

The Registration Game: Account Registration – Email vs. Phone Verification

Born in 1706, Benjamin Franklin was one of the Founding Fathers of the United States. He was a successful newspaper editor and scientist amongst many other things. Many different quotes are attributed to him but perhaps the most famous one he is still known for today is “Nothing is certain but death and taxes.” If Benjamin Franklin was alive today, he would most surely have added ‘apps’ to that list…

In the summer of 1983, six months away from launching the first Macintosh, Steve Jobs said, “It would be a little like a record store, where software would be downloaded over phone lines.” That certainly happened, and we call that store ‘AppStore’ today.

It is fair to say that mobile applications have become integral to the daily lives of many of us and the app industry is continuing its trajectory of dramatic change and development. From being woken up in the morning on time and in a gentle, relaxing manner to falling asleep reading (and every moment in between) there is, without a shadow of a doubt, an app for that!  Apps have made everything just a click away.

Before Android and iPhone came IBM’s Simon in 1994, the first ever smartphone. There was no such thing as an ‘app store’ at the time of course but the phone came preloaded with several apps like Address Book, Calculator, Calendar, Mail, Note Pad, and Sketch Pad. In fact, over 10 inbuilt apps. A quarter of a century ago, they were simply referred to as ‘features’ though. In June 2007, Apple released its first iPhone which changed the whole game of mobile industry and the rest is history.

Today there are a combined total of over 4 million apps available for Google and Apple users and 2018 saw in the region of 200 billion app downloads. That alone creates a huge authentication market with plenty of possible headaches and bumps in the road along the way.

With over 4 billion internet users globally today, this means about 53% of the world’s population has access to it. This is providing real impetus to the trend of increasing global online retail sales which are estimated to be around 9% of total retail spending today. E-commerce sales are set to double worldwide in the coming five years This allied with other online spending and general in-app purchases resulted in a total of almost 600 billion non-cash transactions last year. With a compound annual growth rate (CAGR) of over 12% forecast for the coming few years, there is only one way this non-cash transaction trend is heading. The world of payments certainly is evolving rapidly but with that massive increase has come a wave of ever-increasing fraud.

Adding verification, an extra layer of protection, is now so important for all organisations looking to tighten up their security. Mitto is noticing a real shift in thinking by organisations in this area; it is far more than a ‘nice to have’.

Take the growing number of app downloads. Add e-commerce and the massive ongoing increase in non-cash transactions. How do organisations best go about registering all their users’ accounts, verifying as they go? Well, there are several options and broadly split down into either the email or mobile verification camps.

Email used to be the de facto registration verification tool of choice but is increasingly being viewed as passé. A key statistic we all have to get our heads around is that the open rate for email is barely above 20%. Email verification is undoubtedly cheap but it doesn’t guarantee that the user is monitoring that mailbox for more than the shortest period of time. I personally know a number of people who use a separate email address and account just for registrations, never using it again, and I am sure I am not alone here. This therefore does not give many organisations the chance to build meaningful and ultimately profitable relationships with their clients.

As we shift further towards a mobile first ecosystem, a user’s mobile number is fast becoming the key component of their identity within the digital world. Applications and browsers over mobile seem to be the way forward and email signup is therefore losing relevance fast.

A2P (Application-to-Person) SMS is most definitely not the only way to verify the registration of a user via the mobile channel but it most definitely is used heavily.

Facts such as an open rate of 98% and an average click through rate percentage of Uniform Resource Locators (URLs) in SMS being over four times higher than in emails have cemented its place for the time being.

SMS fits nicely within the mobile flow and thus leads to a higher percentage of the registration flow, creating higher value and return for user-acquisition spend.

There are some other innovative methods for mobile number verification out there such as missed calls and reverse missed calls using standard voice. Here the last five digits of the mobile number which generates the missed call will be treated as the one-time password (OTP).  The user entered mobile number receives a missed call from a random number. With the reversed missed call method, the user has to call a number provided by their application. This will be a missed call and the user’s mobile number will be verified accordingly.

On April 30th Facebook released an SDK (Software Development Kit) that allows mobile app developers to integrate WhatsApp verification into the Account Kit (large set of developer tools) for iOS and Android. The intention is to allow developers to build apps where users can opt to receive their verification codes through the WhatsApp installed on their phone instead of through SMS.

Going forward, Facebook may not be the only OTT (Over-the-Top) chat app provider to go down this path but the market is fragmented. A2P SMS is ubiquitous though. It will definitely figure strongly in the account registration and verification market for some time to come and irrespective of channel, the Mitto team can help you with any registration and verification requirements you may have.