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The Importance of Secure Age Verification in Online Transactions

The Importance of Secure Age Verification in Online Transactions

The Importance of Secure Age Verification

Did you know that an estimate of one in three internet users may be a minor? Although the reliability of this claim is questionable, according to Unicef, children are on track to make up a growing share of internet users.

This statement may concern online businesses, especially the ones that provide age-restricted products or services. But it’s not just about keeping children from accessing such resources. It’s also crucial to guarantee robust age identification, secure and private data processing, and a swift, user-friendly verification process for all customers. Hence, this article will further analyze the intricacies of online age verification and why the security of such systems is of utmost importance to any online business.

What is age verification?

Online age verification confirms the age of online customers and prohibits access to content or services for those who aren’t of suitable age. Think e-commerce sites that sell alcohol or tobacco, online gambling platforms, along with other sites like social media and video game marketplaces.

In most cases, these websites are regulated by laws that require them to sell age-restricted products or services strictly to customers of legal age. In other scenarios, websites may choose to verify their user’s ages for tailored user experience or customization purposes.

Common methods of online age verification

Digital age verification can range in levels of assurance they offer, and websites generally use the ones that suit their business and compliance needs the most.

  • Self-declaration is the lowest assurance method, as it only requires the user to mark a checkbox or enter a birth date.
  • Credit card checks offer low to medium assurance as the user has to enter their credit card details. However, it can be exploited by unauthorized persons.
  • Online usage patterns help indicate with moderate assurance the maturity of users by analyzing their browsing history or even the online content they publish.
  • Biometrics utilizes artificial intelligence (AI) for various profiling techniques, such as facial recognition. This method can offer medium to high assurance rates.
  • Digital identity document verification provides high assurance as digital IDs are typically tied to government-issued IDs.
  • Government-issued ID documents give the best assurance as they’re provided by the government and have various security features built in that can be validated. For instance, the user can be required to use their phone’s NFC technology to scan the document’s microchip.
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However, not all of these methods are secure enough, and some even come with additional privacy and compliance issues. Thus, secure age verification systems generally combine at least a few high-assurance methods to offer the best security.

The 3 consequences of compromised age verification

Non-compliance

It’s the foremost consequence that can even shut down a business when laws and regulations aren’t followed.

Firstly, it encompasses compliance with local rules that govern age-restricted content and services. If these regulations aren’t met, businesses may be subject to fines, legal action, and even lose licenses or permits necessary for their operations.

Secondly, failing to implement secure age verification measures, including secure data storing and tracking methods, can lead to non-compliance with international and local data protection laws such as GDPR, CCPA, or COPPA. This can expose any business to significant penalties and reputational damage.

Financial losses

Not to mention the penalties imposed from non-compliance with regulations, chargebacks can also add up to major financial losses. Improper age verification processes can lead to minors using their parents’ credit cards, digital IDs, or even government-issued IDs without consent to purchase products or services online. In turn, parents may request chargebacks for such transactions.

Damaged reputation

Non-compliance with laws and regulations, chargebacks from non-consenting transactions, and insecure data storing and processing can easily lead to diminished online trust and damaged brand image. Why would customers choose to engage with a business that neglects secure onboarding experience and fails to comply with laws and regulations?

As the world is on the internet, negative reviews spread rapidly. Therefore, a damaged business reputation can lead to a decline in customer loyalty, reduced customer acquisition, and, ultimately, a significant loss in revenue.

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How does secure age verification work?

One of the most secure methods is to ask users to send a copy of their government-issued IDs or confirm their identity through open banking solutions. With the rapid evolution of artificial intelligence, modern age verification systems also don’t shy away from its success, as some companies have implemented facial recognition via AI.

Now, a highly secure age verification system must have several identification processes under its hood, combined with compliance with relative laws and regulations and proper data security mechanisms in place. Not to mention the system should also offer a quick and seamless customer onboarding. That’s exactly the case with Ondato and its age verification solution, so let’s take a deeper look to understand how secure verification works.

Ondato’s age verification services offer a robust and user-friendly solution to ensure age-appropriate access while being fully compliant with the International Standard 27001:2013, GDPR, and other regulations. The AI-driven system uses a customer’s photo or a video and places the user in an age group with 95% accuracy in just a few seconds. In cases where further assurance is needed, businesses can request their users to provide government-issued IDs to confirm their age.

Final thoughts

While some online businesses may opt for less secure age verification methods due to budget constraints, they unknowingly undermine their own future. As the online landscape continues to evolve, it’s clear that ensuring secure age verification isn’t just a choice—it’s an absolute necessity. It’s fair to say that the only probable future of a successful online business is built on these three pillars: security, privacy, and age-appropriateness.

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