Mobile Age Verification Imperative to Safe Commerce of Regulated Goods

February 23, 2016

As mobile commerce sweeps across all industries, age-restricted goods and services like gaming, alcohol, tobacco and adult entertainment are increasingly sold on the mobile channel and must be regulated. 

An entire generation is playing with their parents’ smartphones before they can even talk, and minors are easily bypassing current age verification solutions by simply entering a date of birth that allows them access, whether it’s 18 or 21.

It’s evident that merely entering a date of birth is not an effective way to manage access to age-restricted content and retailers face major fines and could even be shut down if they are caught selling to minors. So how can merchants protect themselves?

By leveraging the camera in mobile devices, mobile merchants of age-restricted goods can accurately verify a customer’s age using ID verification and Mobile Verify. This mobile technology has been extremely useful for preventing minors from purchasing and accessing age-restricted goods and services for a variety of industries.

Six industries in particular are implementing mobile identity verification solutions to meet regulatory requirements and protect themselves from fines and legal ramifications by ensuring access is restricted to those of the legal age:

Identity Verification for Age Restricted Commerce

1. Online Gaming

To meet legislation requirements aimed at preventing crime and money laundering, gaming sites  can use ID verification to ensure players are 18 or older and when issuing payments. Prior to implementing identity verification solutions, online gaming sites relied solely on user provided data and information from debit and credit cards. Since users under 18 can obtain a debit card this method was ineffective. Additionally, the online gaming industry must consider the simplicity of its identity verification process. A study by Experian showed that visitors will abandon the onboarding process if it lasts more than four minutes.

2. Tobacco

The Prevent All Cigarette Trafficking (PACT) Act requires tobacco e-tailers to verify the age and identity of a customer before accepting the order. A top tobacco retailer in the U.S. has implemented a Mobile Fill solution and now requires mobile users who want to enter their site to take a photo of the back of their driver’s license, which automatically provides their date of birth. They found this method is much more reliable than allowing users to manually enter their date of birth since it is easy for users to lie. Previously, they had to regulate certain photographs and advertising statements to users under 21 or 18 (depending on the state) because their ages could not accurately be verified. 

3. Pharmaceuticals

Pharmaceuticals face numerous DEA restrictions depending on the specific product that a user’s prescription is for, and thus a solid identity verification process is required for future online pharmacies. Some of the largest pharmacy retailers are already beginning to implement mobile identity verification solutions that use driver’s license information to pre-fill forms. This helps them meet DEA restrictions by ensuring the user submitting the prescription is the user who is authorized to have access to the drugs prescribed.

4. E-Cigarettes

E-cigarettes have come under fire for health concerns and for marketing deemed too focused on minors. E-cigarette sales to minors are banned in at least 40 states and sites must regulate purchases and certain content. But a recent study by the UNC Lineberger Comprehensive Cancer Center found that minors in North Carolina bought e-cigarettes online with no age verification in almost 94 percent of attempts.

5. Alcohol

To purchase alcohol in the U.S., you must be at least 21 years old. However,  a UNC-Chapel Hill study of 100 online orders of alcoholic products by minors, found that only 28% of orders were rejected based on age verification. Over half of vendors used weak (if any) age verification at the point of order. It was obvious to researchers that current age verification procedures do not adequately prevent online sales to minors. Underage buyers were able to use their real ID and a prepaid Visa card to place an order for alcohol in just a few minutes and often have it delivered to their door in a matter of days without anyone ever trying to verify their age.

6. Video Games

Many popular video games cannot be sold to minors, and some major retailers like Wal-Mart and GameStop check IDs before selling mature-rated games. However, purchasing an M-rated game online is simple for a resourceful minor with a gift card or access to a credit card. By implementing a mobile ID verification system, minors would need to take a photo of their ID proving they are 18 or older, prior to purchase.

Mobile ID verification technology is tested and proven to accurately verify customers’ identities and their age while maintaining a fast and easy mobile experience.

Read more about how mobile verifiaction can help your business meet KYC requirements and say yes to more good customers today in this new whitepaper from Aite's Julie Conroy : Mobile Capture and Identity Verification for More Acquisitions, More Securely

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