HomeBusinessHow Digital Age Verification Benefits Both Consumers and E-Businesses

How Digital Age Verification Benefits Both Consumers and E-Businesses

2021 will go down in history as the year of the World Wide Web. This is because the prior emergence of COVID-19 pandemic had initiated a wave of digital transformation that enabled online retailers to take the reign of commerce into their own hands.

Although this digitization has enabled easy availability of services from the comfort of the home, it has also made the market quite volatile.

What is Digital Age Verification?

Age Verification is a compliance requirement which ensures that customers transacting with online businesses satisfy the legal age limit. It is a mechanism designed to screen and prevent online users from acquiring age-inappropriate content and services.

The International Council of Shopping Centers (ICSC) reports that 27.43% of the global population acquires products or services online out of which 86% of millennials make purchases from their mobile phones. This transfers the burden of liability on online businesses to exercise due diligence in knowing the age-profile of their user base.

What makes Age Verification indispensable?

Age-restricted content covers a lot of territory through mobile and online channels. It includes, but is not limited to, social media platforms, dating websites and streaming services where the user navigates to create an online presence without any adult supervision.

Unsurprisingly, the age checks that most online websites use to perform age verification are quite unreliable and compromised. Traditional online age checks such as ‘tick boxes’ dump the responsibility on the customer for any emotional or physical damages that may arise from consenting to sites or content that minors should not be exposed to. A research conducted by Vitreous World, that questioned 200 UK-based tech organisations, revealed that:

  • 95% of the surveyed businesses are of the opinion that minors should not have access to their company’s age restricted offering.
  • However, 56% of the same entities are failing to achieve that target due to the use of faltering and obsolete age-verification systems.
  • The measures instituted by these businesses to screen customers includes a self-assessment form that is utilized by over a quarter of the entities, 20% use document verification and an additional 10% rely on a credit check report.
  • 50% of the businesses that sell a product such as Alcohol are more likely to implement robust age verification solutions as compared to 71% of those offering a service like pornography, where the perceived harm is more emotional in nature.

How E-Commerce has Changed Since the COVID-19 Pandemic

The rapid globalisation of digital space is driving businesses towards adapting to the constantly evolving consumer needs to survive market competition. A survey predicts that about 2.14 billion people worldwide will be buying commodities online by 2021, a sharp rise from 1.66 billion global digital buyers in 2016. Where the surge in online stores has brought ease and convenience to the forefront, it has also bred significant risks for businesses and customers alike.

E-commerce is home to a never-ending variety of products and services. Where healthcare, electronics and clothing are the mainstream offerings of the online market it is also a space for consumers to buy products and access services, such as e-cigarettes and mature video games, that pose major risks to their safety, well-being and rights.

Why Governments are Censoring the Web?

Against this backdrop, in countries such as the UK, the Office of Communications (Ofcom) assumes the role of an internet watchdog that has been delegated with the ability to penalize social media websites that do not exercise due diligence in protecting their users from harmful content.

This persuades online companies to maintain legitimate operations by integrating their systems with robust age verification solutions. It will ensure that companies instantly bring down graphic content that centers, for example, on terrorism and child abuse or devise strict policies on which it will be required to take action. Not only do consumers receive right content at the right time but also businesses limit the probability of minors engaging in non-consenting transactions that may result in chargeback frauds.

Risks and Obligations in the E-Commerce Sector

A secure age verification software embedded within an e-business website not only helps enterprises in staying compliant with online consumer safety regulations but also provides a layer of fraud prevention that prevents them from falling victims to fraudulent customers. A few challenges that e-commerce platforms face at the hand of their stakeholders includes:

1. Chargeback Fraud:

Out of the total number of chargebacks filed, 86% of them are known to be cases of friendly chargeback frauds. Minors bypass payment card authentication and make purchases which are then claimed by their parents in the form of chargeback frauds. In addition to the refund that the merchants are usually obliged to make, they are also required to pay extra costs to the banks, which is a loss incurred by the firm.

2. Synthetic Identity Fraud:

What is being known as the most common type of fraud happening this year has been termed by Justin Nabity, a financial planner, as “synthetic identity fraud”. “It is like identity theft fraud, but in this type of fraud some information is stolen from an individual and some information is fictional,” says Nabity. Partially fictional identities, consisting of stolen age credential, are used in order to open sham accounts for the purpose of carrying out fraudulent transactions on e-commerce platforms

3. Government Obligations for Business Credibility

Failing to implement diligent systems for restricting age-limited content from children can embroil businesses in defamation and lawsuits. Just like any other traditional enterprise, e-commerce platforms are also under a corporate social responsibility of taking adequate age verification measures to curb the sale of age-exclusive products to minors.

Mastercard has done a great job by collaborating with the Digital Transformation Agency as part of the move in developing a digital identity and age verification system for the Australian federal government that aims to prevent underage users from accessing pornography and liquor sites online.


It goes without saying that an artificially intelligent age verification solution is of prime importance to e-commerce companies around the globe. With the saturation of digital space with varying types of personal names, government IDs and third-party information, online retailers need to take a risk-based approach in balancing the likelihood of social harm with the perceived risk of onboarding a bad actor.

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