Can digital ID track the sale of alcohol online?

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Securing alcohol is one of life’s great adventures, especially if a person is under the legal buying age. This doesn’t give a romantic twist to an illegal and often dangerous activity, but how many of us have stories from high school about stealing schnapps from daddy’s basement bar or cheating on the clerk? from the liquor store with a fake ID?

Well, digital commerce and payments present a new opportunity for such stories and memories – and new challenges and dangers for beer, wine and liquor merchants looking to grow and prosper. As online food delivery services proliferate amid the battle for customer loyalty, and grocery and related stores struggle to go digital, selling alcohol online is on the rise. develops and becomes a more important part of all these plans.

For these plans to be successful, however, a strong system of digital identification is necessary, lest regulators and parents decide that such retail activity is dangerous for children, and take steps to remove it. Indeed, that was the message this week from Philipp Pointner, product manager at the authentication service provider. Jumio, in an interview with PYMNTS.

First, he wants people to know what growing online alcohol sales really means, so that no one is misled. “It’s not really about someone buying a whole keg of beer or several bottles of alcohol to deliver home,” Pointner said. “It’s more about the type of occasional consumption that accompanies the delivery of food. People really like to have this beer to go with their food.

Delivery and alcohol trends

Online food delivery is in the midst of what you might one day call a golden age. A recent UBS report, in fact, estimated that the global online food ordering market will grow 20% annually through 2030, reaching $ 365 billion. Cheaper deliveries and adults who cook less than previous generations are among the main factors in this growth.

At the same time, the sale and delivery of alcohol online – a retail business that has seen significant missteps and false starts since the early days of e-commerce, and which is still hampered by various national laws and regulations. locales – seems to be taking a step forward (or, at least, approaching that point). Overall alcohol sales could slow, but the online channel is a growth channel for beer, wine and liquor merchants.

According to an estimate, online alcohol sales in the United States reached $ 1.7 billion in 2017, with grocery stores poised to become the primary driver of these transactions. Globally, online alcohol sales will grow at a compound annual growth rate of 2% through 2025, according to another estimate, driven in part by a greater demand for “premium / super premium products” – which, when it comes to alcohol, are for many consumers easier to buy online than at home. local stores.

As the debate rages on Millennials’ spending habits – they are not so young anymore and are nearing their prime earning years – online alcohol service provider drizzle consider more growth, Instacart expands its own alcohol delivery services and supermarkets, other retailers, beer companies and software providers come into the game.

Role of biometrics

For Jumio’s part, he is betting on biometrics and using the technology and lessons that have brought more confidence in age verification to online game providers and e-commerce of electronic cigarettes. Underage consumers are often smart enough to cheat even digital authentication checks (admittedly some are rudimentary and even intended to be cheated, depending on the wishes of shady operators), but technology makes it more difficult.

In the case of Jumio, the authentication effort comes down to Identification data points, biometrics and computer intelligence. A consumer who tries to make an online purchase of beer, wine or alcohol may be asked to prove his age by submitting, depending on the retailer, a scan of his driver’s license, for example, or by entering all four last digits of their social security number. number, with that merchant then performing a background check.

Jumio’s authentication technology asks for these credentials and requests that the buyer submit a selfie. This provides another layer of evidence that the consumer is who they say they are – not a parent, grandparent or uncle, cousin or older, awkward friend.

Miners will always try to play with the system, Pointner told PYMNTS, and stopping that will require cultural changes. But technology can protect digital doors from such attempts and spare some of the smaller liquor dealers the trouble of developing their own in-house systems, the costs of which can be prohibitive unless the business is “born online.” – which applies to these. food delivery service providers – or is a large chain, he said. “More specialized wine merchants will probably have more difficulties”, as will the smaller craft brewers.

Preempt more regulation

The stakes in getting it right are high, Pointner said. Online alcohol sales is still in its infancy, with models and processes yet to be tested. And these sales have yet to gain too much general public attention – a sign of the youthfulness of this retail industry – but as this part of online commerce grows, regulators and parents alike have failed. are sure to pay more attention to it. Mistakes in age checking – or the kind of slackness that gets retailers doomed to police bites – will surely serve as a brake on growth. “It needs to be taken very seriously,” Pointner said.

In general, digital identifiers – those documents which are the main means by which citizens identify and authenticate themselves, such as driver’s license – are spreading across the world, but there is a tremendous amount of work to be done before they become common enough to, perhaps, serve as a way for buyers to prove their age when buying alcohol online . But that’s more than a few years away. For now, the sellers of these products need other means to ensure that they are not providing alcohol to underage consumers through online channels.

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NEW PYMNTS DATA: 2021 HOLIDAY SHOPPING OUTLOOK

On: It’s almost time for the holiday shopping season, and nearly 90% of US consumers plan to do at least some of their purchases online, up 13% from 2020. The 2021 Holiday Shopping Outlook, PYMNTS surveyed more than 3,600 consumers to find out more about what drives online sales this holiday season and the impact of product availability and personalized rewards on merchant preferences.


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