How Authentication Tech Is Stamping Out Illegal eCig Purchases

Water always finds the lowest point — that’s a fact of life. So, too, is this: Underaged consumers will always try, and often find ways to, circumvent restrictions on purchases of goods that they are not supposed to buy until they reach maturity or, at least, the age of majority.

Excuse the homespun wisdom, but offering weak authentication defenses in the face of those determined young consumers can bring down heavy fines and unwanted attention, and threaten a growing retail or online business. In this case, we are talking about the global market for eCigarettes.

To learn more about how to better authenticate online purchases of those products (the vapes, the liquids), and how to do so in ways that are seamless and secure, PYMNTS spoke with Reinhard Hochrieser, director of product management at Jumio, an authentication solutions provider.

Market Growth

First, a word about the stakes involved. According to one report, the global eCigarette and vaping market will reach $47.1 billion by 2025, experiencing a compound annual growth rate (CAGR) of nearly 24 percent. Though Jumio estimated that some 70 percent or more of eCigarette sales take place in stores (those tiny storefronts that have seemingly popped up everywhere), there is clearly a big chunk of those sales happening online — with more room to grow the industry’s digital revenue.

That said, lax authentication measures for the online sales could provide regulators with another reason to crack down on the market. However, authentication also provides business opportunity.

Store Training

That’s due, in large part, to the clerks employed by those stores, Hochrieser told PYMNTS.

Sure, clerks who check IDs to verify the legal purchasing ages for vape and associated items have the advantage — in theory, at least — of being able to inspect those documents from “different angles,” he said. “It’s more secure in the store, if you have an educated person” doing the ID checks, “but many have not had the right training.”

In addition, when it comes to different states or different nations (think of young people traveling in Europe, for instance), a clerk might be a de-facto expert on a few forms of identification, yet easily fooled by forgeries of other states’ or countries’ ID documents.

So, what’s the solution — at least, for online purchases of eCigarettes?

Biometric Role

In Jumio’s case, the authentication effort comes down to ID data points, biometrics and computer intelligence. A consumer who tries to make an online purchase of eCigarettes might be asked to prove their age by — depending on the retailer — submitting a scan of their driver’s license, for instance, or entering the last four digits of their social security number, with that merchant then doing a background check.

Jumio’s authentication technology asks for those ID details, and requests for the shopper to submit a selfie. That provides another layer of proof that the consumer is who they have said they are — not a parent, grandparent or an older, ne’er-do-well uncle, cousin or friend.

To authenticate the consumer, Jumio does not use information from any government database. “It’s pretty hard to get access to that,” Hochrieser said. Instead, the company relies on its artificial intelligence (AI) and machine learning technologies, and its experience with analyzing more than 150 million documents. Furthermore, it has human experts ready to review any borderline cases, with the results then fed back into the system so it can get better, he explained.

In Jumio’s view, the inclusion of the selfie in the authentication process also has deterrence value. The thinking is that underaged consumers who are about to attempt a criminal act — a relatively minor one, but still illegal — will not want to attach their digital headshots to that offense, which could turn away some illegitimate purchases.

Privacy Concerns

What about privacy, though?

According to Hochrieser, eCigarette businesses that use the technology don’t receive the full IDs submitted for age verification. Instead, they get “data points” that determine whether or not the transaction should be rejected or authorized. That, he said, “protects against a breach,” as potentially compromising information is not shared widely with a global client base.

Tobacco, gambling and alcohol continue to gain more availability for online purchases, which means authentication of those purchases will keep getting more important. Biometric checks — along with machine learning, AI and human expertise — seem likely to form the best defense against underaged purchases in the years to come.