Preventing underage alcohol purchasing online using payment card details
Building on my prior research Effective age-gating for online alcohol sales, this follow on study, funded by the Institute of Alcohol Studies (IAS), has focused on addressing a growing concern: the online purchase of alcohol by underage individuals. With the rapid rise in digital transactions, particularly fueled by the COVID-19 pandemic, it's more critical than ever to develop robust methods to ensure that age-restricted products do not end up in the hands of minors. This blog post delves into the insights and recommendations from my research on using payment card details to prevent underage alcohol purchases online.
The Problem: Rising Online Alcohol Sales and Insufficient Age Assurance
The COVID-19 pandemic has significantly altered consumer behavior, with online alcohol sales in the UK increasing by 18.9%. This surge highlights a gap in the current regulatory framework, as existing age verification methods are often inadequate or intrusive. Retailers typically rely on various techniques, from simple age gates asking for a birthdate to more complex methods like uploading identification documents. However, these methods either lack reliability or intrude on customer privacy.
The Solution: Leveraging Merchant Category Codes (MCCs)
A promising solution identified in my research involves expanding the use of Merchant Category Codes (MCCs). MCCs are four-digit codes used during payment card transactions to identify the type of business. Currently, these codes are used to enforce age restrictions for online gambling. By adapting this system, we can create a seamless and privacy-preserving method to enforce age restrictions for alcohol and other age-restricted products.
How It Works
The proposed system requires minimal changes to existing payment processing infrastructure. Here’s a step-by-step breakdown of how it can be implemented:
- Product Identification: Retailers mark age-restricted products in their databases.
- Transaction Processing: During a transaction involving age-restricted products, the retailer assigns a specific MCC code indicating the age restriction.
- Bank Verification: When the transaction is processed, the acquiring bank recognizes the age-restricted MCC code and verifies the cardholder’s age based on their account information.
- Approval or Decline: If the cardholder meets the age requirement, the transaction proceeds. If not, it’s declined, and the customer is informed.
Benefits of Using MCC Codes
- Minimal Customer Friction: This method works in the background, reducing the need for intrusive age checks and maintaining a smooth customer experience.
- Privacy Protection: Only the necessary age information is used, with no need to share detailed personal data or specific purchase details.
- Legislative Compliance: This system helps retailers meet legal requirements efficiently, ensuring that only age-appropriate individuals can purchase restricted products.
Implementing the System
Retailers will need to update their systems to recognise age-restricted products and assign the appropriate MCC codes during transactions. Banks will need to implement checks to verify the age of cardholders based on these codes. This process can be rolled out progressively, allowing stakeholders to adapt without significant disruption.
Potential Challenges and Mitigation Strategies
While the system is robust, it’s not entirely foolproof. Here are some potential challenges and how they can be addressed:
- Using Someone Else’s Card: Individuals might attempt to use a parent's or older friend’s card. Combining MCC-based verification with other age assurance methods, such as delivery ID checks, can mitigate this risk.
- Bank Data Accuracy: The system relies on accurate age information from banks. Regular updates and checks by banks can ensure data integrity.
- Bank Participation: Initially, not all banks might support the new MCC codes. A phased implementation approach allows time for gradual adoption.
Prototype and Simulation
To demonstrate the feasibility, a prototype was developed simulating the customer journey on an e-commerce website. This prototype includes steps such as navigating the website, adding items to the cart, processing payment, and handling transaction outcomes based on age verification. The results showed that using MCC codes for age assurance is both practical and effective, maintaining customer privacy and ensuring compliance with age restrictions.
Conclusion and Future Directions
The research points towards a scalable and efficient method to prevent underage alcohol purchases online using payment card details. By leveraging MCC codes, we can implement a system that is both user-friendly and compliant with regulatory standards. Future research can explore integrating this system with other age assurance technologies to further enhance its robustness.
As we move towards an increasingly digital economy, ensuring that age-restricted products like alcohol are sold responsibly online is imperative. This system not only helps in regulatory compliance but also protects young people from accessing products that could harm their health and well-being.
