Compliance, regulation, data protection – these are all topics that are becoming more relevant and important every day and have long since crossed the boundaries of certain industries. This is why we are looking into KYC in gaming today.
Why KYC in Gaming?
The gaming industry is a good example. These topics have been relevant for a long time, but have not always been well received by the target group: the gamers themselves. Every gamer wants to enjoy the best possible data protection, but at the same time often feels that their privacy has been violated if data has to be transmitted first in order to achieve optimum data protection, as paradoxical as that may sound.
KYC is an important area here. Not just an issue since yesterday, more people are now coming to terms with its relevance and the initial skepticism is increasingly giving way to broad acceptance. Provided that the topic is dealt with transparently.
But what exactly is KYC?
KYC is short for “Know Your Customer”. It is a process for verifying the identity of customers that is carried out by companies in order to prevent money laundering, terrorist financing and other forms of economic crime.
The main objectives are:
- The identification of customers to ensure that they are who they say they are.
- Assessing the risk of a customer being used for money laundering or other forms of economic and, of course, cybercrime in our area.
- Monitoring customer activity to identify suspicious transactions.
From the very beginning, it was a major focus to protect all participants of FiPME. This user protection needed to be by design and not by virtue like most other ingame items exchanges.
How does KYC in gaming help ingame item traders?
Players, i.e. those who buy and sell ingame items, should operate in an environment in which a whole range of measures have been implemented to make the trade of and with these items secure and to protect buyers and sellers as well as possible from various scams.
This starts with the trading process itself, i.e. the transaction process, which is designed to ensure that the seller actually receives their money and the buyer their item.
However, this is only the visible tip of the iceberg. There are processes running in the background that ensure the best possible application of data protection guidelines, compliance and regulation in general at every moment of using FiPME.
KYC is an important cornerstone for us. Of course, this has also presented us with the challenge of identifying and implementing routines that are as globally applicable as possible. Although the requirements of many countries around the world have a certain common denominator, some of them differ considerably in certain details.
We are also aware that some players who want to trade ingame items on FiPME may find these measures too restrictive or invasive, especially at the beginning.
We therefore want to be transparent about these measures at all times and make them visible rather than hidden.
What are the limits of KYC in gaming?
Of course, we are aware that KYC cannot prevent all forms of money laundering and white-collar crime, but it definitely puts a stop to such activities. We also work closely with various institutions and companies to close almost every identifiable loophole that could open up in this area, or to prevent it from happening in the first place.
It is a process that is very time-consuming and costly, especially at this stage of development. On one hand it is important to us that we do not find ourselves part of a gray market, where gamers and traders are left to themselves and scammed out of their hard-earned ingame items or hard-earned money.
Small or medium-sized developers, in particular, will benefit in this way, because they won’t have to worry about implementing such routines themselves. Renowned developers and publishers have also already indicated that they are very interested in a solution that saves them the sometimes very costly, subsequent implementation.
Where will KYC go?
In principle, the implementation of KYC is a very relevant component for us in order to ensure three of our most important principles:
- User protection
- Data protection
- Fight money laundering (publisher protection)
We are also actively working to increase acceptance of a more thorough view on user protection by applying KYC in gaming.
In fact, companies that use standards such as KYC do not want to restrict users or encroach on their privacy – on the contrary.
Rather, it is about protecting the users. In our case, it is mainly to protect the assets of our users: their real money and their ingame items.
Focus on what you want to do: Play and be safe on FiPME!