What Is Identity Verification?
Identity verification is a process that ensures a user attempting to access and transact with an online service is who they claim to be. This prevents unauthorized persons from performing actions on someone else’s behalf, and enables websites and applications to block access by fraudsters.
Identity verification services use a number of techniques and technologies.
Traditionally, identity verification is done using a face-to-face process, in which individuals identify themselves at a company’s physical location and present documents such as passports or government-issued IDs. An agent can then verify that the photo on the document matches the person presenting it. In many cases, the document is photocopied and the identified user fills out a form and is approved to proceed to access the protected resources.
Identity verification is more challenging online, as there is no physical location where a user can come to present an identity document. Online identity verification services use various techniques and technologies to allow users to remotely identify themselves by providing a digital copy of their identity documents, and automatically verifying its authenticity.
In this article, you will learn:
- What Are the Benefits of Adding ID Verification to Your Process?
- Types of Identity Verification
- Selecting an Identity Verification Solution
- Identity Verification with BlueCheck
What Are the Benefits of Adding ID Verification to Your Process?
Know Your Customer
Know Your Customer (KYC) is a principle that helps protect organizations from risks like money laundering and fraud. KYC is a legal requirement in some industries, in particular the financial industry.
KYC compliance is not as disruptive as it was in the past. Businesses like financial service providers can now leverage electronic KYC, which is much easier than traditional processes of physical ID-based verification.
Age verification is another use case of identity verification. In some industries, goods and services can only be sold to customers above a certain age. Age verification should not be confused with an age gate on an online store, which cannot reliably verify a user’s age.
With accurate age verification, the system can notify users of an age restriction and prevent access automatically if they are under the specified age limit.
Age verification can also enhance user experience, for instance, by enabling automatic birthday greetings according to validated birth dates. Automated email marketing tools can leverage the validated dates to simplify this process.
Preventing Online Attacks and Fraud
Attackers can use fraudulent personal information or fake identities to target online businesses. Accurate identity verification is an effective means of protecting your business from attackers trying to make purchases with fake or stolen credit cards.
If an attacker fails the ID verification process, they cannot complete their transactions. On the other hand, a legitimate user will have no trouble confirming their identity and proceeding to buy your products.
This results in safer business interactions. You can make it more difficult for an attacker to defraud your company while ensuring that legitimate customers can buy your products and services without too much hassle.
Types of Identity Verification
There are various types of digital verification solutions. Digital identification involves comparing personal data provided by the user (such as facial biometrics and identity documents) with validated data sets (data held by third party consumer data sources, government, passport data, etc) to validate the identity of the user.
There are many different methods of digital identity verification, including:
- ID document scanning—accepts a copy of the user’s ID document (driver's license, passport, government ID, etc.) and checks that it is valid.
- Biometrics—uses a selfie to verify that the person presenting an ID card is the same person on the card. Learn more in our guide to photo ID verification.
- Liveness—detects spoofing attacks such as masks and photos of photos to make sure the selfies presented are real.
- Knowledge-based authentication (KBA)—generates personalized questions based on information in the applicant's personal credit file.
- One-time passwords (OTPs)—during the authentication process, a one-time password is sent to the applicant via SMS or email.
- Trusted identity network—uses existing credentials from an applicant’s account with another provider, typically a credit bureau, to verify the applicants' identities and reduce friction in the process.
- Databases—the database approach uses data from social media, offline databases and other sources to verify information submitted by applicants.
Learn more in our detailed guide to ID check online (coming soon).
Selecting an Identity Verification Solution
The following factors will help you evaluate an identity verification service or solution.
Some online ID verification solutions offer coverage within a specific country, because they lack access to information databases specific to other countries. Different countries have different laws and regulations, which will also affect the availability of information. Companies with a global presence should opt for identity verification solutions that support all the regions in which they do business.
Real-time verification is an essential feature of an identity verification solution. To balance customer experience with security, you need to be able to provide a registration process that verifies users in seconds. If the verification process is too slow, you could potentially lose conversions.
Your chosen solution should be compliant with all relevant regulations. If you fail to verify identity or age in a way that complies with regulations, you could face fines or legal liability. For example, if you provide products or services that are restricted for use by minors, or collect information from minors, you could still face serious legal repercussions in most countries.
API and Documentation Availability
Ensure your solution offers an API, which will let you integrate the solution with website and web application capabilities. The API should be robust and support the programming languages used by your website’s developers.
Identity Verification with BlueCheck
BlueCheck’s industry leading identity verification infrastructure enables merchants to grow their business faster. Serving a wide variety of industries, our solutions are custom tailored to the unique needs of our customers, including PACT Act and eCommerce compliant offerings.