Realizing our vision of providing both a buying and selling experience that exceeds expectations to create a marketplace so inviting that even first-time users want to sign up relies on mutual trust between users.
In this first installment of our series on Safe and Secure operations, we take a closer look at identity verification (“electronic Know Your Customer” or eKYC), the foundation of that trust.

As phishing scams become a more pressing social issue, Mercari is bolstering its authentication infrastructure. In just two years, ten million users have already registered for passkeys, a biometric authentication feature introduced in March 2023. Introducing a system that allows users to log in without a password has significantly reduced the risk of phishing attacks.

Alongside this authentication infrastructure, another important pillar is eKYC.

At the end of 2024, the topic of users fraudulently switching out returned items spread like wildfire on social media. In one particular case, the seller shipped an authentic item, but the buyer claimed that the item they received was different from what they bought, and then switched the original item with a counterfeit before returning the package to the seller. As a result of this case, Mercari decided to make identity verification mandatory for high-priced item transactions.

Strict identity verification helps suppress the proliferation of fraudulent accounts and enables us to maintain an environment that will allow users to make transactions safely. However, introducing identity verification also risks impacting the user experience of people who want to buy or sell items. So how has Mercari managed to balance safety with the user experience of its platform? We spoke with the product manager who led the project.

The project began in response to a case where a user returned an item but switched the original item with something else

—Can you tell us about the background that led to making eKYC mandatory for high-priced items?

@ebi: In November 2024, we saw a case where a user returned an item but switched the original item with something else. We then received feedback from other users who had listed brand-name items. They told us that they had shipped an authentic item, but then someone swapped it with a counterfeit item. We even received strong criticism on social media, with comments questioning whether it was possible to safely and securely use our platform.

In response to this, we worked on strengthening identity verification for high-priced item transactions. We thought that if both sellers and buyers completed identity verification, we could build a marketplace where sellers and buyers do business exclusively with other sellers and buyers who have completed identity verification. In this way, we aimed to build a marketplace where users can safely list and purchase items.

—What impact has implementing mandatory eKYC had?

@ebi: As a result of our work, transactions between verified users have increased to 76%, and we’ve also seen a trend of improvement in the transaction dispute rate for high-priced items (source: September 2025 Transparency Report). I feel that we’ve contributed to improving the safety and security of our product in a way that you can plainly see in the numbers.

If you wait until after pressing the listing button, it’s already too late—a battle with UX.

—Making identity verification mandatory risked compromising the user experience, wouldn’t you say?

@ebi: Yes, it did. There was a strong possibility that users would raise questions or concerns about things like why they need to verify their identity to make a purchase, and what steps they have to take to list an item.

To stamp out those concerns, we focused particularly on creative solutions in design. We had daily discussions with designers and the Customer Support (CS) team to design an experience that would allow users to complete identity verification seamlessly.

—What were some of the specific improvements you made?

@ebi: Our most fervent discussions centered on the issue of when to request that a user verify their identity.

Initially, we were considering a design where identity verification would be requested after a user clicked either the list button or the purchase button. However, we received feedback from the designers that this would create too much resistance among users. If users are asked to verify their identity after taking photos, entering the price and category, and getting everything ready, they’ll understandably leave without finishing the process.

We therefore improved the flow so that users knew early in the process that they would have to verify their identity. Once an item meets the conditions for high-priced items, we notify the user that they need to verify their identity to list their item. Our design changes gave users a chance to prepare themselves mentally.

—Did you implement any other improvements?

@ebi: We leveraged the national Individual Number card (“My Number card”). In our design, we accentuated the message that identity verification can be completed in as little as one minute using the My Number card.

More recently, the My Number card is seeing wider usage, resulting in more cases where identity verification can be completed more seamlessly. As long as you have your card with you, you can verify your identity right away. By communicating how easy the registration process is, we were able to reduce the number of users who leave without finishing the process.

Also, there are situations where it can be hard to verify your identity such as while on the train. To address this, we also established a system where, even if the user leaves the page without finishing the process, the task is added to their to-do list, allowing them to resume the process at their convenience.

Furthermore, we spread awareness about completing identity verification for users who have not yet done so. This has included sending push notifications and personal messages, and posting information in the Mercari Help Center stating that identity verification is required to purchase high-priced items. We are developing comprehensive measures beyond the eKYC feature to increase the number of users who complete identity verification.
Note: The initiatives described in this article are implemented in accordance with privacy protection and all applicable laws and ordinances.

Words alone cannot convey everything—collaboration that draws on each person’s expertise

—How did you manage to collaborate with designers, the CS team, and engineers?

@ebi: We were deeply involved in discussions literally every day.

For instance, in our initial design, the identity verification screen only had text on it. We used two lines of text to explain that identity verification is required for high-priced item transactions, but the CS team returned with feedback that users don’t like to read a lot of text.

We made two major improvements. The first was to simplify the wording. We changed the screen into a simple “Identity Verification” button and removed any unnecessary explanations.

The second was to add visuals. We placed icons for the My Number card and driver’s license so that it was clear at a glance which documents could be used for identity verification. Users tend to close text-only pop-ups quickly, but adding images increases the likelihood that they will catch people’s attention.

@ebi: We incorporated the opinions of the CS team into the design revisions in depth. They are the ones who hear from our users on the front lines every day, so we were able to incorporate insights from the field into our designs—such as what wording would allow for smooth identity verification and which tools would provide the fastest experience. This is what led to our current approach.

Additionally, during the development of this feature, we collaborated with engineers from our development base in India, so there were a lot of crossborder interactions. Making full use of opportunities to meet face-to-face and work together as a team was another positive aspect.

To eliminate user resistance to identity verification, we moved forward with a Be a Pro approach that leveraged our strengths in each area.
Each designer, CS team member, and engineer that worked with us maximized their expertise, while continuously providing uncompromising feedback and improvements and prioritizing the improvement of the user experience. From a growth perspective, there were concerns that introducing identity verification would increase the number of users who left without finishing the process. However, over several rounds of discussions, the team was able to create a design that satisfied all stakeholders, leading to an improved user experience and a sense of accomplishment.

Beyond identity verification

—Could you share your thoughts on what is in store for Mercari regarding safety and security?

@ebi: Making eKYC mandatory for high-priced items is just one measure for realizing a safe and secure marketplace.
Our work on fraud prevention takes place behind the scenes. It allows users to use Mercari safely and securely as well as conveniently without having to be constantly on the alert. With this as our goal, we plan to continue implementing improvement measures in response to changes in the environment surrounding our business.

—So whether or not the user spares a thought about Mercari being safe and secure, they are properly safeguarded on our platform.

@ebi: That’s exactly right. By thoroughly eliminating fraudulent activities and providing aid to affected users, we aim to create a marketplace that anyone can use with peace of mind. We see that as our mission.

Photography: Tomohiro Takeshita