The pandemic has only accelerated the growth in online gaming in the country. Here are some numbers to understand the extent of this meteoric growth: In FY21, the Indian online gaming industry was valued at Rs 13,600 crore. This is expected to more than double to hit Rs 29,000 crore by FY25.[i]

However, as gaming platforms garner increasing popularity, there has also been a rising incidence of frauds. Gamers become easy targets for fraudsters given that many of these games involve in-game currency, in-game purchases, and real money.

Common frauds in the online gaming industry 

An unregulated gaming industry can be vulnerable to many types of frauds:

Fake apps: Scammers may create fake apps to install malware on devices, which then steals personal information of the user. They may also get backdoor access to the user’s device, resulting in direct theft from the user’s bank accounts or credit card.

Spoof sites: Fraudsters send links or texts to gamers for verifying gamer information and in the process, steal their credit card or bank account data.

Money laundering: Many offshore gaming platforms are also used as fronts for money laundering and other illicit activities.

Further, there are also cases of widespread underage gaming and development of gambling habits. Given the revenue the gaming industry generates in India, there is certainty a need for proper regulations to protect the interests of gamers as well as gaming platforms or intermediaries.

Introduction of KYC norms for the gaming industry

In December 2022, the Ministry of Electronics and Information Technology (MeitY) was appointed as a nodal authority for online gaming. In Jan 2023, MeitY published draft amendments to the Information Technology Rules, 2021, proposing regulations for the gaming sector.[ii]

These draft amendments require all online gaming intermediaries to verify the identity of customers at the time of registering a new account for playing games.

However, the gaming industry has requested a relief in the KYC norms and suggested that MeitY follow the master directions for small prepaid payment instruments (PPIs) of the Reserve Bank of India (RBI). This would involve a simpler registration process for deposits lower than Rs 10,000.

Latest reports say that MeitY may not create stricter requirements than the RBI’s, with a graded approach to KYC norms for online gaming with real money.[iii]

The introduction of full KYC (know your customer) requirements would put the burden of heavy technical requirements on operators to verify customers. This also includes developing a video-based customer identification process to comply with KYC requirements.

Given the complexities gaming operators may face, Perfios Total KYC can be a ‘gamechanger’ for onboarding new users onto gaming platforms quickly. The solution encompasses complete KYC verification including PAN & Aadhar verification, KYC OCR checks, and more. Moreover, the Total KYC suite also includes Video KYC with award-winning cognitive features such as Face Liveness and Match, Address Match, and Name Match, all optimized for India-specific needs.

Gaming intermediaries need not invest in separate infrastructure for these checks as Total KYC works via APIs and is plug-n-play. While making digital onboarding frictionless, it can also be cost-effective for gaming platforms to use. In addition, the solution is designed to comply with RBI’s KYC guidelines and meets the strictest data-privacy requirements, ensuring the data security of gamers.

Well-devised regulations in the gaming industry are certainly a step in the right direct ion if one wants to elevate the quality of games, drive revenues, and build a positive perspective about the Indian gaming industry.