How Does Online ID Verification Work?

We all verify our identity every day, often multiple times. Punching a PIN into a point-of-sale (POS) machine at the shop counter, or showing a photo ID, for many of us it has become so commonplace it barely registers. But for other high-value agreements, such as opening a bank account or switching to a new wireless plan, more thorough ID verification is required.

As more transactions move online, digitization of the ID verification process can drive significant efficiencies and create new channels for businesses to serve their customers, such as taking manual, face-to-face verification and streamlining it via online platforms. While many business processes are being modernized via digital technologies, ID verification is still slow, manual and prone to human error.

Unfortunately, ineffective manual ID verification is commonplace across both B2C and B2B companies. This typically results in bad customer experiences, fraud, and failure to maintain regulatory compliance. For many organizations, the ability to accurately verify ID in a timely manner is essential for business to function, allowing for the creation of contractual agreements, compliance with regulations, and delivery of services to customers.

By using digital technology to automate ID verification, organizations provide a smoother and more consistent experience for employees, customers and staff. This technology helps make it possible to onboard new employees who are working remotely, by scanning I-9 forms validating employee IDs digitally. Crucially, it minimizes risk by providing higher signer assurance, and facilitates compliance with regulations like Know Your Customer (KYC) and Anti-Money Laundering (AML). 

What is online ID verification?

Online ID verification is when individuals present government-issued identity documents to verify their identity online just as they would in person. For businesses delivering services to consumers or hiring new employees, there are many occasions where more thorough ID verification may be necessary:

  • A telecommunications provider signing up a new customer to an ongoing service agreement, such as a mobile phone contract
  • A bank or organizations opening a new account, changing account information for an existing customer, or processing a mortgage application
  • A real estate agent finalizing a rental agreement
  • An insurer issuing a new insurance policy
  • A business hiring a new employee who works remotely

Whereas the ID process is traditionally done in person, online ID verification makes it possible to be done remotely. Remote verification of ID saves time while creating more efficient processes because applications can be completed wherever the customer may be.

ID Verification works hard behind the scenes, ensuring that only valid identity documents are accepted. This method of verification is accomplished by analyzing alphanumeric data and sets of unique information within an identity document. The name and information on the agreement is then cross-checked with the one on the document. This ensures that only the correct individual can view and sign the agreement.

How DocuSign ID Verification works

When you add DocuSign ID Verification to a document to be signed electronically, the recipient will be required to complete the ID verification steps to view and sign the document. The following steps illustrate how to obtain the necessary information.

 

Step 1: The recipient takes a photo of their ID and uploads it

Your recipient will receive an email notification. Before they can access the document, they’ll be prompted to verify their identity, based on the country where they are located. They can do this by making a copy or taking a photo of their government-issued ID. They can use a driver’s license, passport, or European eID.

Step 2: ID verification analyzes features of the ID

ID verification will analyze the ID features, such as security markings and watermarks, to ensure validity. It’ll also confirm that the name on the ID matches the name on the agreement. Automatically analyzing data reduces the risk of fraud and increases feelings of trust and security with your customers.

When looking at the form of identification, ID Verification verifies that:

  • The ID is not expired. 
  • The name exactly matches the envelope as specified by the sender. 
  • The Machine Readable Zone (MRZ) is consistent with the rest of the ID. The MRZ is the string of letters and numbers on the bottom of the passport. It usually appears as a barcode.
  • Visual features/holograms are consistent with what that ID type should look like.
  • There is no evidence of tampering in terms of fonts, letter spacing, holes in the ID, etc.

Step 3: Tie in ID verification with form completion

Companies can save time by combining electronic signatures with identity verification. With DocuSign, employees who send documents for signing can require ID verification by clicking the “ID verification” button included on their agreement and continuing with the usual steps to send the document. When providing ID verification in the form completion process, it’s best to provide an end-to-end solution to avoid confusion. By linking ID verification and signature collection, you provide a seamless, professional experience for your customers.

Step 4: ID photos are securely stored. 

Once IDs are captured and verified with ID Verification, the photos get securely stored. DocuSign’s ID Evidence feature stores captured data automatically after verification. This list of data is configurable and can include images of ID documents used in the ID verification process. To make these files easily accessible for the future, each stored copy or photo is linked to a specific transaction for a particular signer.

Photos can also be stored in a customer’s existing information system after they are captured by ID Verification. This can be done manually as the customer can access the copy/photo of the ID document via the DocuSign user interface on the web or programmatically through an API.

Identifying your customers isn’t just valuable for protecting your business from fraud. You’ll also streamline compliance processes for regulations such as KYC and Anti-Money-Laundering. In some regions, a digital agreement is not legally enforceable without being tied to a secure identity verification process. Verifying IDs is an essential part of doing business securely. Having reliable verification processes puts customers at ease and creates more opportunities to grow your business. Digitizing the identification process reduces risk, increases trust, and supports legal validity and compliance. 

Learn more about DocuSign ID Verification.

 

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