There are a number of age verification services and solutions available in the UK, primarily set up to verify that users are over 18.
The goal is to restrict under 18 access to a raft of e-commerce sectors: igaming, tobacco, alcohol, knives, fireworks, solvents, butane, crossbows, airguns, +18 videos, computer games and shortly, adult content. Retailers, platforms and payment processors in these sectors however, have been hampered by not having complete and publicly available databases to reference.
So in these regulated sectors, if the merchant is unable to gain a confident match on the user’s name, address and birth date plus verify that the user is over 18, then it simply means that no match = no sale.
Merchants in these regulated sectors are not only striving to reduce payment friction, with industry cart abandonment rates at almost a third, but they are also faced with the situation where the adult user may still be declined due to insufficient data coverage. Equally, many providers will charge for no matches, forcing the merchant to decline a valid user.
In some cases this rejection rate can be also be as high as 30 percent of users, depending on age and demographics. This could be even higher in those adult sectors given the increased level of young male adult access to free content is significant.
So why aren’t these databases used to validate age and kick out false positives that impact top line sales? Because there is a significant demographic in the UK, known as the ‘thin file,’ where users are not on public sources, have minimal or no UK credit footprint and no utility coverage, or the user simply moves and doesn’t leave a forwarding address.
The ‘thin file’ demographic includes:
- 16.2+ million Millennials born and reside in the UK with a thin or no credit file;
- 39.7 million UK visitors (forecast) in 2017. Most will not be on the UK voters roll, have a credit footprint or hold domestic utility accounts;
- 400,000 overseas students with funding remittances from overseas;
- 7 million migrant workers in the UK, many of which will have overseas bank accounts;
- 9.5 millon people residing in the UK who do not have a UK passport;
- 1.5 million unbanked.
Therefore, there are over 67.3 million potential accounts that regulated merchants will have a problem verifying age through traditional UK data sources. This impacts the merchant’s no match = no sale ratio.
Aristotle’s Integrity division is the world’s leading provider of age-verification solutions. We have developed unique global solutions to improve match rates across these hard to match demographics and the ‘thin file’ and will only charge for positive matches. Our team has a deep understanding of the impact of international legislation on age-sensitive markets including igaming, entertainment, tobacco and adult content.
If you’re a regulated merchant, platform or processor looking to support child protection and significantly improve your match to sales ratio we’d be happy to talk to you about developing the best on-boarding strategy.
Vice President, Global Business Development