Why Age Verification Matters to Online Businesses?

Why Age Verification Matters to Online Businesses?

2020 changed the way the world functioned, leading to a redefining turn for the digital age. More people are engaging with technology and online network today than ever. And that has lead organizations and companies to design their business strategy with a 90% focus on online services. Providing online services is a practical, hi-tech, and the way forward. But it does raise the question of keeping certain services and products away from reaching and influencing young people.

That is why online age verification plays a huge role. Even though online businesses contain basic age checks like ‘tick boxes’ so that users can confirm their age before accessing a site, it is unreliable. The system depends on the customer to be honest and responsible; something that teenagers are not always.

Why is Online Age Verification needed?

Why is Online Age Verification needed

The easy availability of different services on online platforms has also turned the market volatile. This, along with the fact that services like online gambling, pornographic sites, and other adult services are harmful to children, makes online age verification critical.

For many business services, online age verification is a legal requirement. Given that online entertainment today is widespread and generally happens through mobile and online channels, it calls for adult supervision. Online businesses must realize that online age verification is crucial the same way actual gambling outlets and retail stores verify age. These businesses require practical age verification solutions.

When websites enforce age restriction, it ensures that children cannot purchase products or access content and services meant for 18 above.

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What Risks do Companies Face from not having Age Verification Mechanisms?

What Risks do Companies Face from not having Age Verification Mechanisms

If companies with online services do not apply age verification mechanisms, they could face non-compliance penalties. It might also lead to a fall in market reputation for online and offline services alike.

Here are some of the risks that companies face for lack of age verification mechanisms:

Non Compliance Penalties

The GDPR (General Data Protection Regulation) applies to all companies and organizations irrespective of what service or products they offer. The regulation ensures that the personal data of users is kept secure and private. The framework works well and serves the purpose of age verification during customer’s digital onboarding process. If a company fails to comply, GDPR can impose a fine between $23 million to 4% of annual global turnover – whichever is greater.

On the other hand, Children’s Online Privacy Protection Act (COPPA) had a minimum non-compliance penalty of $160,000 which was later increased to $43,280 per violation.

Damaged Market Reputation

One of the critical aspects of a business to grow online is to offer an excellent customer experience. Digital customer onboarding is one way to ensure a complete customer experience. A survey by Customer Thermometer concluded that 13% of consumers were ready to pay 31-50% more if they had a good onboarding experience. Meanwhile, if you do not have reliable age verification software during onboarding, it could lead to a lousy brand image apart from non-compliance penalties.

Financial Damage

Several companies face friendly fraud from parents who chargeback against their children’s non-consenting transactions. If these companies had an age verification software integrated into the application and an age verifier, it could stop chargeback losses for the business. Such software regulates age-restricted products and service usage and thus, helps a company save its losses.

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Industries that Require Age Verification

Industries that require age verification

Today, most companies have realized the need for online age verification software. With growing mobile traffic on most applications, underage usage and the sale of age-restricted products to minors are concerns. Let’s take a look at some of the industries that require age verification.

Alcohol and Tobacco

The two products are well regulated worldwide. The FDA has a strict prohibition on the sale of cigarettes to minors. Plus, there is an age restriction of 21 years on alcohol sale to an individual in the US. It makes online age verification for alcohol and tobaccos sale a high priority.

Gaming

Online gaming is an open portal where children can talk to any player from across the world. The situation puts them in danger of falling for scams apart from experiencing online bullying and harassment. Hence, online gaming portals require age verification to safeguard young users.

Gambling, Betting

Like alcohol and tobacco, gambling is highly regulated worldwide. Children can quickly get gambling and betting addictions since online websites are easy to access. When age verification happens during entry on online gambling websites, it prohibits children from playing.

Dating Websites

Online dating service is on a rage during the past decade. These sites offer very low entry restrictions, and any underage user can access their services without breaking a sweat. Underage dating is considered an offense in most countries, resulting in legal action. With strict age policies and verification systems, dating service providers can check underage access to their service and avoid legal actions.

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Age Verification Regulations in Different Countries

Various countries worldwide have assigned regulators that watch over access to online services, gambling, products like medicines, etc. Every country has their age verification regulations in place. Belgium, Denmark and Spain assign eIDs to children once they turn 12. The minimum age to purchase alcohol in Europe is different for each country – UK, Spain, and France allow 18 and above while Italy and Denmark allow 16 and above. Here are some age restrictions in various countries:

Age Restriction on Product Purchase

UK: In the United Kingdom, under the Protection From Tobacco Act 1991, Offensive Weapons Act 1996, The Pyrotechnic Articles (Safety) Regulations 2015, Video Recordings, and Gambling Act 2005 Act, online retailers cannot sell alcohol, tobacco, knife, fireworks, video recordings, and games to minors.

US: FDA legally obligates online businesses that sell age-restricted products to possess age verification scanners. Under the Prevent All Cigarette Trafficking (PACT).

Denmark: Under Act no. 426 of 18 May 2016, any sale of nicotine-containing and non-nicotine e-cigarettes to anyone under 18 is an offence.

Germany: The Protection of Young Persons Act contains prohibitions regarding games, alcohol, and tobacco and determines the age limit for different sub-parts.

Gambling Access

UK: The Gambling Act 2005 dictates all online gaming websites to conduct legit identity and age verification before any customer can open their account. The UK has a gambling age restriction of 18 years above.

Spain: Under the Ley 13/2011 de Regulacion del Juego 25 2011 (Gambling Regulation Law 13/2011), every data that a customer declares is checked against their eID database.

Denmark and Italy: Both the governments have a standard interface according to The Gambling Act 2012 and The Abruzzo Decree 2010. These interfaces must be a part of the registration process totally personal data with government databases – Fiscal Code identifier and NemID.

Germany: The country has The Gambling Acts where each German state directs regulators to put a fine of up to 500,000 Euro.

Age Restricted Online Content

UK: The UK government had plans to put age verifications on online adult content to prevent minors from accessing these sites (The Digital Economy Act 2017). Unfortunately, in October 2019, they suspended the project, citing privacy breach issues.

USA: Under Children’s Online Privacy Protection Act, nearly all social media services have an age limit of 13 and above.

How iDenfy can Help?

How iDenfy can Help

iDenfy offers customer age verification along with identity verification during the digital onboarding process. It turns customer’s device into an ID scanning and facial recognition system for faster identity verification. When combined with liveness detection, iDenfy gives a user-friendly 4-step verification process that stops various frauds and restricts underage usage of age-restricted services and products.

The online verification during digital onboarding makes it easy for customers to fulfil all the conditions and carry out their transactions seamlessly. It makes the onboarding process faster and thus, giving the customer a better service experience.

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