What method can a company use to verify a customer's identity before processing a payment?

Requiring phone number verification is an effective method for verifying a customer's identity before processing a payment. This process typically involves sending a one-time code (often referred to as SMS verification) to the customer's provided phone number, which they must then enter to confirm their identity.

This step adds a layer of security and helps ensure that the person attempting to make a payment has access to the registered phone number, making it much harder for fraudsters to impersonate legitimate customers. Phone verification is widely used across various platforms as it provides a balance of security and user convenience, ultimately protecting both the business and its customers from unauthorized transactions.

The other methods listed do not offer the same level of identity verification reliability. For example, requesting a social media profile may not confirm the user's identity accurately, as social media accounts can be faked or hacked. Allowing guests to complete transactions without checks poses a significant risk of fraud, as there are no methods in place to verify their identity. Lastly, relying solely on user-defined passwords can lead to weak security practices since passwords can be easily guessed or compromised. Thus, phone number verification emerges as the most viable option for identity verification in the context of payment processing.