ID Verification

An ID verification process works by validating user ID documents such as a national ID card, an official travel passport, or any other government-issued identity document that gives essential details about the end-user. Other proof of verification may also include bank statements, utility bills or tax returns. The process incorporates original IDs along with facial proof of the user so that any impersonation fraud could be taken down, and comprehensive identity verification can be performed. 

How Does ID Verification Work?

An ID verification process often called digital document verification is usually divided into the following three steps listed below:

Acquiring Identity Information

As an initial step in the ID verification, the system requests the end-user to upload a photo of their genuine ID document by scanning it using the webcam or a smartphone camera. Once the user submits the required information, it is received at the system-end as an image file of the document. To perform a foolproof ID verification, the user is also required to submit the facial proof in the form of a selfie right after they submit the document.

Performing Verification

When all the essential data is available, the ID verification solution extracts personally identifiable information (PII) of the user from the document using an OCR service. These details are then matched against the data provided by the user through an online form at the time of onboarding. Before the identity information is verified, the document also undergoes authenticity checks to determine any inconsistencies in the format or possible modifications leading to digital ID fraud. 

Sharing of Results 

After the user ID is evaluated against all potential parameters, the client is informed about the results, whether the verification was successful or not.    

What are the Components of ID Verification?

An ID verification procedure usually takes into account two important elements when performing user authentication, that are document authenticity checks and identity verification.

Verifying Document Originality

The ID document is checked against certain parameters that determine the credibility of the ID, some of which are:

• Absence of rainbow prints or hologram marks
• MRZ code authentication
• Document edge detection
• Possible tampering or photoshop
• Document visibility 

Based on these checks, it can be verified if the user ID is genuine or not. Below is a list of IDs not accepted for verification.

Stolen and Fake IDs: These are documents either stolen physically, obtained as a result of identity theft or synthetically created using wrong identity information. Since they belong to anyone except the right person, these are not accepted as valid proof of identification. 

Altered Documents: IDs that are modified purposefully using photoshop or other editing methods used to conduct impersonation fraud.

Illegitimate IDs: These documents are set up by identity thieves from scratch and usually lack important verification features like holograms, signatures and stamps.  

Performing Identity Verification

If the ID document is verified as legitimate after all the originality checks are complete, the information present on it can be used to verify the end-user. Customer details like their full name, date of birth, and related address information are extracted and matched against the data provided by the user in the first place. This enables businesses to onboard trustworthy customers with confidence and declines the request of those attempting to bypass the verification system.

Where can ID Verification be used?

ID verification has a number of use cases in various sectors. The following businesses can incorporate ID authentication procedures to streamline their day-to-day operations: 

• Banking corporations can use it in their Know Your Customer process to identify and verify new and existing customers.
• Insurance companies can make sure insurers and policyholders are trusted by verifying their authentic IDs.
• Cryptocurrency exchanges can incorporate ID checks when initiating transfers between two parties.
• Virtual Asset Service Providers (VASPs) can verify their new clients before offering them relevant service and comply with AML laws and regulations like the 5AMLD.
• The Healthcare Sector can carry out patient identification using ID documents so that health insurance claims are legitimate, and no bad actors breach the system.
• The travel industry can use ID verification to authenticate information on travel documents and passports by validating users in real-time.
• The real estate sector can utilise ID verifications methods to ensure safe deals with brokers and agents.
• E-commerce stores can verify their buyers and sellers to reduce chargebacks costs and failed deliveries.
• In the eSports industry, gamer verification through ID checks reduces the chances of potential money laundering and unbiased e-gaming. 

Suggested Reads: 

ID verification services – Paper ID vs Digital IDs

ID Verification for High-Potential Digital Fraud Cases