Is identity verification a privacy risk?

Verifying someone’s identity is a crucial part of deterring fraudsters and ensuring that the actions that take place on your platform abide by legal regulations. Whether you’re selling alcohol, renting cars, or facilitating cryptocurrency trading, it’s important to have identity verification protocols in place that help protect you and your users.

Some businesses choose to verify identity through phone or email verification, which ties the person’s online identity to their phone number or email address. However, the best way to accurately verify a customer’s identity is by tying their online persona to their offline one– using their government-issued photo ID and real-time selfie to verify their identity.

A government-issued photo ID, such as a driver’s license or passport, combined with a prospective user’s real-time selfie, helps uniquely identify users across your marketplace, and is generally more effective than an email or phone– both of which could be more easily faked. Verification through a government-issued ID also tends to be more successful in preventing the same bad actors from returning to your platform, and some businesses even use this as a way to help others protect their business from fraud.

Using someone’s government-issued ID to verify their identity can give your business access to a person’s personally identifiable information (PII), which some customers may be wary of if they don’t understand why you’re collecting this information.

What information is collected by a document identity verification solution?

Document identity verification (IDV) software solutions like Berbix verify someone’s identity by comparing the image on the person’s government-issued photo ID with their real-time selfie. In addition, the software will also read the barcode, birthdate, street address, and other identification indicators. This information is all used to verify the person’s identity, confirm the ID is legitimate, and, in cases where the person is trying to access an age-restricted product or service, that they’re of age.

The length of time that an IDV solution holds on to this information can vary depending on where the solution is headquartered and their company’s privacy policy. The solutions that store ID information for longer can help prevent duplicate registrations and more quickly identify known fake IDs. 

In general, while the IDV software solution collects the information and typically has processes in place to keep it secure, the business is, at the end of the day, the entity that is in control of this information. This means that a business cannot solely rely on IDV as their only method of fighting fraud. They should also have their own safeguards in place to protect employee and customer data.

Balancing deterrence with privacy

Some consumers might feel wary about providing their ID information to gain access to services when they typically haven’t had to before. For example, everyone understands that they’ll need to show their government-issued photo ID in order to purchase alcohol, but those same people would feel taken aback if they were asked to show their ID in order to purchase a piece of paper. 

With this in mind, it’s important to be upfront and communicative with customers about why they’ll need to provide additional verification in order to do business with you or access your services. Are you a cryptocurrency platform that’s using IDV to prevent fraudulent users from using your platform to scam others? Or are you an e-bike rental company that needs a way to verify people’s ages so you can stay compliant with local regulations?

Most legitimate potential customers will understand why you’re verifying their identity and even feel more comfortable using a platform that has an IDV solution in place. And users that have bad intentions will be deterred from using your services as they’ll have to not only put in extra effort to gain access to your platform, but there’s also a chance that their real identity could be discovered and blocked from accessing your platform in the future.

There will always be a balancing act between a user wanting to keep all of their information private and the business needing access to some of it in order to protect other users and their assets. As it stands today, a document ID verification software solution is still one of the most secure ways that businesses can deter fraudsters without compromising on the user experience. 

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Berbix only collects information you submit and that we receive from third parties in order to verify your identity. Learn more about our privacy policies here: https://terms.berbix.com/terms/privacy. 

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