6 E-Commerce Industries That Require Digital Age Verification Solutions

Information Technology has revolutionised the digital landscape in recent years posing significant benefits for users. Many of the transactions that people used to have face-to-face have now moved online, especially since the outbreak of COVID-19 pandemic. Needless to say, this massive influx of online users has seen the e-commerce industry face unforeseen challenges.

Identity verification has also become more important than ever due to the unrestricted levels of information flooding online. Although features like next-day shipping and encrypted payment methods have increasingly made e-commerce safe and accessible to all people, it has also facilitated the flow of users to previously considered ‘undeserving’ industries such as CBD and adult-only subscriptions. 

What is Meant by Age Verification?

Age Verification is a procedure designed to safeguard online users from consuming digital content and services that are prohibited or not suitable for their age. Entities that sell age-restricted products are liable to exercise enhanced due diligence in the sale of their services to people who do not satisfy the legal age requirement. A study by the International Council of Shopping Centers (ICSC) estimated that 27.43% of the global population now buys products or services online with 86% of millennials making purchases through their mobile phones. This makes it important for online businesses to know the age-profile of their user base in order to maintain legitimate business operations which can be ensured by equipping e-stores with a digital age verification solution. Such systems provide a safe and secure channel for minors to perform online activities, and keep the regulatory compliance intact. Not only do consumers receive the right content at the right time but businesses limit the probability of minors engaging in non-consenting transactions that may result in chargeback frauds.

How Online Age Verification Works

Online age verification has gained a lot of prominence amongst industries that operate within the digital sphere. It is widely used as a security measure that has replaced the age gates of the past enabling businesses to deliver age-appropriate services to deserving audiences. The embedded Optical Character Recognition (OCR) technology verifies a user’s age by extracting their date of birth from their government-issued IDs, followed by the calculation of age to determine if the person falls within the category of mature audiences.

Industries That Need Age Verification Solutions

The exponential growth in wider online activity has made it necessary for some specific industries to acquire competent identity and age verification solutions so that they do not fall in contravention with global age verification laws such as the GDPR, FFDCA, NVP, COPPA and the Gambling Act of UK. If due to the absence of necessary age checks, underaged customers are able to access age-sensitive platforms, businesses can be subjected to serious legal prosecutions. To avoid notorious penalties and lawsuits, the following industries should rely on a robust age verification solution:

1. Esports

The Esports industry is expected to top $1.6 billion by the end of 2023. Needless to say that such massive revenues will be generated by almost 2.7 billion gamers as reported by Newzoo. With such an online presence children can easily fall prey to a wide variety of scams ranging from financial frauds to offensive language and obscenity if gaming companies do not play their role in providing age restricted games to appropriate audiences. 

2. Online Gambling 

The ability to make instant money makes gambling a dangerous fixation amongst youngsters. The $647.9 billion gambling industry will further grow at a rate of 5.6% from 2022 - 2027. Surely, this growth comes at the expense of minors who regularly perform e-betting activities without the consent of their parents. The UK Gambling Commission has reported an approximate of 400,000 youngsters in the country who regularly engage in unsolicited gambling. E-betting platforms such as Poker websites need to implement robust age verification checks in their systems to validate the age of their players before allowing onboarding. Such measures can help minors in keeping from the bad habit of gambling.  

3. Liquor Industry

The World Health Organization iterates that alcohol consumption kills almost 2.9 million people annually with the numbers significantly rising. In the US, The National Minimum Drinking Age Act of 1984 sets 21 as the legal drinking age, however, not all states abide by this legislation. Trendy inventions in the tobacco industry such as vapes attract more minors than adults. The global vapes market is expected to grow at a CAGR of 15% during 2019-2024 which means that more minors will fall victim to a life-long habit of smoking. This rise is being facilitated due to the foibles of industry vendors in adhering to age regulations. Through age verification solutions minors can be prevented from using their parent’s payment cards, in procuring such unlawful commodities.

4. Pharmaceuticals 

With the advent of e-pharmacies, patients can now purchase medications from the comfort of their homes. Nevertheless, the digital healthcare landscape, permeated by unauthorized vendors that sell drugs such as Cannabidiol over-the-counter to underage minors, pose the greatest threat to industry laws and regulations. PR Newswire reports that by the end of 2027, the CBD industry is estimated to value at $73.6 million. It is indispensable for online pharmacies to incorporate third-party age verification systems within their POS software to ensure safe business operations that screens minors, contributing towards building trust and compliance with regulatory bodies.   

5. E-Commerce

It is estimated that a staggering $2.14 billion people will be shopping online for commodities by the end of 2021. This also consists of those web-savvy consumers who will try to gain access to age-exclusive e-commerce sites. Such sites may deal in the sale of products such as alcohol, dating apps, e-cigarettes, and subscriptions of adult-themed content. The burden of responsibility falls more on the vendors to ensure that their online marketplaces are equipped with robust age verification systems in order to verify consumer age.

6. Online Dating

Dating websites are one of the most age-sensitive websites that might run the risk of onboarding minors on their platforms. Underage dating is prohibited in most parts of the developed world because of the emotional and physical harm that may stem from immature relationships. If due diligence is not maintained by online dating websites, onboarded minors may fall prey to heinous acts of cybercrime such as online sexual harassment. Therefore, it is important for dating sites to verify their user base with state-of-the-art age verification solutions rather than just relying on social profile information.

Conclusion

The limitless expansion of the World Wide Web is facilitating the development of new products and services everyday. However, the same cannot be said about compliance mechanisms. Online merchants are under a corporate social responsibility to safeguard minors by restricting their access if what they are selling is age-inappropriate. Only age verification solutions can guarantee businesses that they are using cost-effective methods to abide by juvenile regulations.