Insights from Interac Corp.|Whitepapers

Digital Identity in Alcohol & Cannabis

3 minute read
3 minute read
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Reducing fraud, protecting customers and staff, and speeding transactions

Verifying the age of a customer is a fundamental part of many transactions, and the presentation of physical ID has until recently been the only choice for meeting this requirement.

Introduction

The alcohol retail industry has gone through many transformations over the decades, while cannabis, recently legalized, is arguably going through its very first. Despite their difference in age, however, both tightly regulated substances are simultaneously facing the challenge of how to do business in a world shaped both by digital commerce and by an unexpected pandemic. In meeting this challenge, digital ID has a significant role to play. Verifying the age of a customer is a fundamental part of many transactions in these sectors (it happens, for example, with each of the four million annual cannabis transactions in Ontario1), and the presentation of physical ID — a driver’s licence, for instance — has until recently been the only choice for meeting this requirement. Physical ID, however, has limitations: it is notoriously vulnerable to fraud, it is inconvenient and slows transactions for both merchants and for customers. It involves a risk of viral transmission (passing an ID card to a cashier for inspection), and by making available information — like a customer’s name and address — not strictly needed for the sale, it undermines privacy. As we will see in this white paper, digital ID holds the potential to address all of these shortcomings — in doing so, helping alcohol and cannabis retailers serve their customers more effectively than ever.

1 A Year in Review (2019-2020): Ontario’s first full year of legal cannabis operations;
published by the Ontario Cannabis Store (OCS)

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