It’s possible to combine the best of both worlds: a KYC process that is both fully compliant with Brazilian regulations and optimized for maximum conversion.
The KYC dilemma in iGaming: how to balance security and user experience without losing revenue
The goal of any iGaming platform is to register a player and get them to their FTD (First Time Deposit) as quickly as possible. However, the regulatory environment demands precise identity verification to prevent money laundering, fraud, and underage gambling.
This is where the conflict begins.
Generic KYC processes — often adapted from foreign markets or the financial sector — fail in the Brazilian iGaming context for three main reasons:
* Excessive friction: long processes, multiple simultaneous steps, and redundant requests make users abandon registration before even depositing.
* False negatives: systems not calibrated to Brazilian reality reject legitimate users due to unrecognized document variations, digital formats, or image types.
* Slowness: validations that take minutes or rely on manual review create bottlenecks that kill conversion. Every extra second of waiting increases abandonment rates exponentially.
The result is an expensive, inefficient acquisition funnel where massive marketing investments are wasted at the final registration stage.
The real cost of false negatives
If an operator spends R$150 in CAC (Customer Acquisition Cost) to bring a user to registration, and the KYC system has a 70% approval rate (a common benchmark among generic solutions), each rejection represents R$45 in wasted CAC.
For an operation processing 10,000 registrations per month, that means 3,000 qualified users blocked in the funnel and R$5.4 million in annual acquisition losses.
For the regulator, poor KYC is a fine risk. For the business, it’s a continuous revenue leak.
The 3 Pillars of High-Conversion KYC with Brazilian Expertise
To operate efficiently, the key is to understand that the solution isn’t choosing between compliance and conversion — it’s integrating both through technology and deep local expertise.
That’s possible through three fundamental pillars:
1. Cascading orchestration
Think of KYC not as a wall, but as an intelligent funnel. Instead of bombarding the user with dozens of simultaneous checks, an efficient architecture works in a progressive cascade.
It starts with light, fast validations: CPF lookups in public databases. A system optimized for Brazil performs this check in less than a second, cross-referencing over 220 million CPF records, including death verification, PEP (Politically Exposed Person), and AML (Anti–Money Laundering) lists.
If data matches, it moves to document validation — where most generic systems fail and Brazil’s real challenges begin.
First, digitalization. Many citizens no longer carry physical documents: RG has become the digital CIN, and CNH moved to an app. Any solution that doesn’t accept official PDFs rejects legitimate users right away.
Second, document diversity. Brazil’s variety is unmatched: each state issues RGs with unique layouts, the CNH has gone through three visual redesigns, and more.
Third, device quality. A large portion of bettors use entry-level smartphones with limited cameras. Poor lighting, folded documents, worn prints — all of this must be processed without creating false negatives.
This is where specialized Optical Character Recognition (OCR) comes in. Generic OCRs, designed for passports or international IDs, fail when faced with Brazilian realities
A Brazil-optimized OCR must:
* Recognize distinct state layouts (e.g., RG-SP vs. RG-CE vs. RG-AM)
* Process native official PDFs (digital CNH, CIN)
* Handle low-quality images — blurry, poorly lit, reflective
* Extract data with maximum precision (a single digit error can mean rejection)
The difference between generic and specialized OCR can mean 15–20 percentage points in conversion rate.
2. Facial biometrics with true liveness detection
Asking for a selfie is easy. Ensuring it belongs to a real, live person present at the moment — not a photo of a photo, pre-recorded video, or deepfake — is the challenge.
Liveness detection must be robust without adding friction. Passive 3D liveness analysis can perform depth scanning through color and microexpression mapping, detecting spoofing without requiring complex movements or multiple attempts.
The challenge is twofold: blocking sophisticated fraud (deepfakes are increasingly accessible) without rejecting legitimate players due to poor lighting, angles, or natural appearance variations.
Integrating liveness with facematch (high-precision facial similarity comparison) creates a full real-time authenticity validation layer.
3. Native integration with Brazilian sources and regulatory compliance
The final decision — approve or reject — must happen in real time, without hours or days of waiting. This is only possible when the system is deeply integrated with the Brazilian ecosystem.
* Direct connections to government databases: Serpro (CPF), Denatran (CNH), and state Detrans. These integrations must be native, stable, and SLA-guaranteed — “good enough” isn’t enough.
* Structured data processing: automatic cross-checking between extracted document data, biometrics, and official records. Any inconsistency must be handled with intelligent business logic, not just automatic rejection.
Example: a document may say “João da Silva,” while the Serpro database lists “João Silva” (without the preposition). A basic system would reject it; an intelligent one applies normalization and fuzzy matching before deciding.
* Compliance with LGPD and iGaming regulations: all data must be processed with explicit consent, following Law 14.790/23 and ordinances from the Secretariat of Prizes and Betting under the Ministry of Finance.
Is your onboarding process optimized for the Brazilian market?
Many platforms operate with hidden risks or lose revenue in conversion bottlenecks without realizing it.
Signs your KYC may be costing you money:
* Approval rate below 85% on first attempt
* Average validation time over 45 seconds
* High support ticket volume related to registration
* Frequent complaints about rejected valid documents
* Dependence on manual review for more than 10% of cases
If any of these sound familiar, your operation likely has clear opportunities for optimization and revenue recovery.
Specialized platforms like Legitimuz are built for the Brazilian scenario, achieving conversion rates above 85% and approval rates over 98%, with full verification in under 30 seconds.
To turn compliance into a competitive advantage, the first step is partnering with proven local expertise. Schedule a diagnostic and discover your operation’s true conversion potential
Source: Legitimuz
