The gaming industry as it exists today is booming globally with revenues in the hundreds of billions of dollars and millions of people as audiences with versatile age groups. This industry has appreciated incredible growth in recent times and is expected to make the global gaming industry worth $321 billion by 2026, according to PwC’s Global Entertainment and Media Outlook 2022-26. With the growth of the industry, the need for KYC has also substantially increased and is important for a number of reasons. It helps to protect the industry from fraud and money laundering while also verifying the authenticity of the user. This is important for both the gaming industry and the users themselves. Despite being a little daunting (as we assume) for some users, it is important to remember that the process is in place to protect both the industry and the users.
Defining KYC in the gaming industry
In the gaming industry, KYC refers to the process of verifying the identity of players to make sure they are meeting the sign-up criteria for the game parlors. To comply with KYC regulations, gaming companies and casinos ask for certain pieces of information from the customer, which might include name, date of birth, address, and contact details, usually in the form of any nationally accepted ID cards and for a minor, a school/institution ID card. These guidelines are put in place to prevent money laundering and fraud.
Importance and benefits of KYC in the gaming industry
Since it helps to combat money laundering, fraudulent attempts, and any other illegal act, KYC in gaming prevails for the betterment of the industry and user experience. They usually do money laundering by transferring the funds through a series of bank accounts or shell companies, and gaming accounts have also become another vase to store “non-white money”. Other frauds that are most prevalent in the industry include players using stolen credit cards to fund their casino accounts or children using parents’ or guardians’ credit cards to complete transactions without permission. Besides, they may also use fake documents to verify their identity, and by complying with KYC regulations, gaming companies can inhibit such cases.
I as quoted additional benefits:
Combat fraud and cheating
Improve customer satisfaction and thus, their faith
Better customer retention
Helping children to monitor their gaming addiction
How does verification affect your gaming experience?
If we dig deeper into the implications and responses, KYC might be a time-consuming and mundane task for the players, mostly when the timing is said to be a crucial ingredient in joining the gaming lobby.
In casinos, players can get annoyed by attempts to confirm identity while withdrawing the winning amount, which might be a concern for the majority.
Streams of usernames and passwords can also hamper the user experience in competitive multiplayer games.
What could be the Businesses' contribution?
Businesses that utilize KYC solutions can be assured of their contribution to the security of the industry as a whole. With KYC solutions, businesses confirm that the user is of legal age, has the capacity to enter into a contract, and has the required documentation to prove their identity. This helps businesses to protect themselves from potential legal and financial liabilities, as well as ensure that the user has appropriate documentation to access their services. In addition, businesses that use KYC solutions can also be sure that they are providing their customers with the highest level of customer service possible. This can be especially important for businesses that offer online gaming services, as it can help to ensure that their customers are able to access their services without any issues. Overall, businesses that use KYC solutions can be sure that they are playing a vital role in the security of the online gaming industry.
Challenges and solutions
There are a few challenges that the gaming industry faces when it comes to KYC compliance. The inadequacy of standardization in KYC requirements is the primary one, which states that each gaming company tries to put forward its own cluster of requirements that could create a mess when it comes to users’ feasibility and desired requirements. Second, the gaming industry is global, and players may be located in different countries with different KYC requirements. This can make it difficult to comply with all the different regulations. Finally, the gaming industry is constantly changing, and new technologies are constantly being developed that can make it difficult to keep up with the latest requirements.
Many gaming companies are based in geographies where KYC regulations are not well developed or enforced. This means that gaming companies may not have the necessary infrastructure in place to comply with KYC requirements. Also, the gaming industry is a highly competitive and fast-moving sector, which means that gaming companies may be reluctant to invest in compliance processes that could slow down their operations., The anonymous nature of online gaming means that it can be difficult to verify the identity of users. This can make it difficult to comply with KYC requirements, particularly when it comes to KYC checks on withdrawals.
There are a few solutions to these challenges. One solution is to use a KYC service provider that can help standardize the KYC requirements for the gaming industry. Another solution is to use a KYC platform that can automate the compliance process. This can help to reduce the burden on gaming companies and make it easier for players to comply with the KYC requirements. The third solution is to implement a KYC framework that is tailored to the gaming industry. This can help to ensure that KYC requirements are appropriate to the industry and that gaming companies are able to comply with them.
If we focus on the needs of the gaming industry for identity verification in terms of KYC, we can expect a brighter tomorrow. Businesses and startups that are experts in KYC solutions can enter the market and take the lead, which can help the government improve its monitoring and businesses grow their revenues. Additionally, gamers’ experience with an honest and fair gaming platform can also exceed their satisfaction and performance.