Games have been one of the prime sources of human entertainment ever since the dawn of time. While traditional games have existed for millennia, the internet brought a whole new world of online games. Today, over 3.2 billion people are active gamers in the online world. With this many people engaging in games all around the world, it has become essential for gaming businesses to identify their customers. Gaming KYC refers to processes for gaming platforms to authenticate their customers’ identities.
A growing industry
The gaming industry is huge and it creates two subdivisions. These are the video game industry and online gambling industry.
The video game industry in 2023 is valued at about USD 384.90bn. whereas the current worth of the gambling industry is estimated to be about USD 88.65bn. Both are attracting millions of new customers every day, without leaving any demographic behind.
Simply put, both industries are ever-developing and are actively contributing to the global economy.
Gaming and Crime
The gaming industry is huge, profitable, and also very important. Over 11% of all global web traffic is fueled by this industry. However, this skyrocketing population is also attracting crime.
The majority of the communication and transactions between online gamers, gamblers, and betters are cross-border. This makes gaming KYC both essential and difficult.
Gaming industries hold risks for a range of significant kinds of crimes including identity theft, minor exploitation, and money laundering. In spite of all these risks, the industry is still valuable and needs to be protected owing to its economic and entertainment. This makes gaming KYC essential for online gaming safety.
Why gaming KYC is essential today?
Gaming KYC is a crucial tool for regulating the industry. However, besides regulation, gaming KYC also offers systems for the protection of the industry as well as everyone who engages with it.
Two kinds of scams are the most common in the industry. These are fraud and money laundering. Gaming KYC is an efficient solution to fighting these crimes.
Online Gaming Verification with KYC to fight fraud
Fraud is one of the most prominent crimes in the gaming industry.
Within the industry, there are usually many in-game currency transactions. This currency is bought with real money and allows gamers to collect new stuff in the game. However, this is not all.
This in-game currency can also be sold for real money or solid cash.
The in-game currency is one of the ways gaming businesses make money. However, it is also one of the prime reasons why fraud occurs in the gaming space. The incidence of fraud in the industry is so high that 1 in every 20 accounts is associated with a fraudster and one in every five gamers experiences fraud.
Gaming fraud verification through KYC protects the industry from several kinds of fraud. Let’s talk about the two most prominent ones.
Account takeover fraud
Account takeover fraud is the most basic and common type of fraud on gaming sites. Here, scammers use fake accounts to post spam and scam users. Gaming KYC is a simple solution to curbing account takeover fraud.
- Firstly, through gaming KYC we process systems of identity verification for online gaming right when a new account signs up. Such instant gaming verification limits the onboarding of fake users.
- Secondly, gaming KYC processes executed over regular intervals allow platforms to catch hacked accounts. Hacking is a common practice on gaming sites. While hacking could still take place for a short period, regular identity verification can limit the time period that a fake account stays online.
Identity theft
Identity verification is a prime aspect of the gaming compliance KYC process. Traditionally, users sign up with a simple set of one username and one password. This is not adequate and leads to a great likelihood of fake accounts.
There are multiple methods for ID verification for gaming KYC. The easiest and most suitable method for initial ID verification is a combination of document and facial verification. The user submits their data, and the system authenticates it.
Additionally, gaming KYC demands stringent methods for data protection. As a result, the likelihood of users’ personal data theft reduces.
Gaming AML KYC to curb money laundering in the industry
There is a large volume of cross-border transactions that take place through the gaming industry. Moreover, large volumes of amounts exchanged supplement the large volume of financial transactions occurring. To add on is the industry value which estimates over USD 384.90bn flowing within the industry today, in 2023.
Industries with lots of cash involved are great for money launderers. This makes gaming KYC essential for curbing money laundering. Additionally, AML regulations are also very important in this domain.
Gaming KYC and AML restrictions demand gaming platforms execute KYC processes every step of the way. It is essential to have internal systems for the regulation of all essential policies. Keeping track of all transactions is also one of the most important AML policies.
Conclusion:
The gaming industry is steadily growing, and this growth is amazing for businesses and, also for the economy. However, all is not sunshine, and the soaring gaming industry is also attracting the attention of financial criminals.
Gaming KYC is a simple yet effective solution to keeping the industry safe from such harm. From fighting the identity theft of unknowing individuals to curbing massive money laundering rings, gaming KYC regulations are increasing in popularity.
