A penny verification transfer is one way to confirm a customer’s identity, which is often used for online loans. What exactly is it and is it safe? We present basic information about the verification transfer.
What is a verification transfer?
A verification transfer, also called a penny transfer, is a way to confirm the identity of the person who applies for the loan or online loan. It allows you to exclude the possibility of a phishing loan, for example, for stolen evidence. It is to confirm that the borrower is the owner of the bank account to which the loan will be sent.
Do not be overly afraid because verification transfer is a completely standard procedure. Of course, provided that we use the services of a proven loan company. To this end, it is worth checking out popular online loans, where you will find a list of frequently chosen payday loans. And what exactly is a penny transfer?
In the event of such verification, when submitting the application, we will be asked to transfer a symbolic amount to the loan company’s account. This amount should not exceed USD 1, usually 0.01 USD, 10 USD or 1 USD. If the amount of the verification transfer will be a few or several dollars, we should check whether the account to which we transfer the money definitely belongs to the loan company we have chosen.
Verification transfer – advantages and disadvantages
Customer verification increases security, so it is necessary when granting cash loans. However, a penny transfer is not the only way to verify the borrower, which will be discussed later in the article. Like any solution, it has its pros and cons. The undoubted advantages include increasing the protection against fraudsters by fraudsters. In addition, a penny loan is simple to apply and exempts us from an additional visit to a bank branch or loan company.
However, it also has a lot of disadvantages, which is why many people choose loans more often without transferring a penny. First of all, it requires customers to have a personal account as well as a minimum amount on this account. Making such a transfer takes longer than, for example, verification via the phone application.
In addition, we have to wait for the transfer to be booked, which is not very favorable, when we decide to pay for it and we want to receive money as soon as possible. Verification transfers are also often used by fraudsters, which is why a request for a transfer of more than USD 1 should be a signal to us that we may be dealing with a dishonest company.
Online loan – other ways to verify the customer
The customer’s identity can also be confirmed by means of an identity card, stating his number and series in the application. It is also possible to verify by phone call or visit of a loan company representative. Customer verification by a mobile application is also increasingly used.