Digital ID verification: What businesses need to know about accepting digital IDs
Micah Willbrand
Chief Product Officer – Identity
Digital IDs are no longer a future concept: across the world, governments are rolling out national ID systems that allow customers to authenticate their identity instantly, without uploading physical documents.
In Europe, for example, businesses will be legally required to accept Digital IDs as a valid proof of identity by 2027, and countries like Denmark and Australia have already introduced their own Digital IDs – MitID and myID respectively – to simplify identity verification processes.
Alongside these upcoming regulatory requirements, you may worry about falling behind customer expectations. After all, onboarding flows that still rely on photos of driver’s licenses or passports introduce friction and therefore increase drop-off rates. The more competitors adopt digital-first identity checks, the higher your risk of losing legitimate customers to more seamless onboarding solutions.
Despite this momentum, many businesses are unsure how to prepare. Digital ID requirements and formats vary by country, and given that it’s still quite a new concept in regions like the US, you may be wondering how Digital IDs work in the first place – and how they might eventually affect your operations.
In this article, we’ll cover:
- What is a Digital ID?
- How onboarding new customers via Digital ID verification works
- Four benefits of including Digital ID verification in your onboarding process
- Understanding how Digital ID adoption differs in the US and Europe
- How to prepare your business to accept Digital IDs
- How GBG helps businesses accept Digital IDs for faster, more secure customer onboarding
Ready to start accepting Digital IDs with GBG Go, our all-in-one identity orchestration platform that makes it easy to onboard customers using Digital IDs as they get rolled out? Request a demo.
What is a Digital ID?
A Digital ID is an electronic credential that’s used to prove a person's identity. It contains the same core information as a physical ID – such as a person’s name, address, and date of birth – but is stored digitally, typically on a smartphone in a digital wallet like Apple Wallet or Google Wallet, or in a standalone app.
Digital IDs are issued and verified by trusted entities. The main categories of Digital IDs include:
- National government eIDs: These are issued by government authorities from a national identity database. Denmark’s MitID is one example.
- Local or state government IDs: These are issued by local or state authorities. Mobile driver’s licenses (mDLs) offered in some US states, such as California and Louisiana, are examples.
- Bank-issued IDs: These are issued by trusted financial institutions. An example is Sweden’s BankID, which is issued by a consortium of Swedish banks.
- Private sector reusable Digital IDs: These are verified once through identity checks and reused across multiple services. For example, in the US, many sports stadiums and airports accept Digital IDs by the biometric technology company CLEAR.
How onboarding new customers via Digital ID verification works
Here is an overview of what the Know Your Customer (KYC) onboarding process looks like with a Digital ID:
- A business requests a verified credential from a customer’s digital wallet or a standalone app that holds the Digital ID.
- The customer consents to sharing the requested information. Oftentimes, the customer can consent to sharing only specific information required for the transaction (referred to as a “claim”), such as their age if they’re purchasing age-restricted products.
- The issuing authority, such as the government or a trusted identity provider, confirms the validity of the credential, enabling identity checks instead of traditional document scans or data lookups.
- The digital wallet sends back cryptographically signed (encrypted) data.
- The data is used in the onboarding process to decide whether to auto-approve the customer, flag them for review or additional checks, or block a fraud attempt.
Four benefits of including Digital ID verification in your onboarding process
Here are four ways Digital ID acceptance can help you strengthen compliance and improve your customer onboarding experience:
1. Have a fully tested, high-converting onboarding journey ready ahead of regulation
By supporting Digital ID verification processes early, you give yourself more time to test and optimize your user experience instead of scrambling to perfect it at the last minute. This approach gives you a competitive advantage over businesses that wait until adoption is mandatory.
And this shift is already in motion: as EU member states start launching their own digital wallets and IDs to comply with eIDAS 2.0 – which expands the original eIDAS regulation to create a standardized, EU-wide Digital identity system by 2027 – organizations that prepare now can begin accepting new Digital IDs as they become available instead of rushing to quickly update their systems later down the line.
To illustrate just how quickly these changes are coming into effect, let’s look at Italy as an example: The country’s Legislative Decree No. 41/2024 is set to fully deploy by March 2026. It requires anyone wanting to open an online-gaming account to use a valid identity document for identity verification.
While using a Digital ID isn’t required – other valid documents are also accepted – online gaming companies that accept Digital IDs will be able to onboard more customers quicker.
Additionally, with millions of Italian citizens already using Digital IDs after the widespread rollout of Italy’s Digital identity system, SPID, Digital IDs have become the norm and many customers will expect to be able to use one to create their online gaming account. Companies that don’t provide that option may lose out on business.
2. Onboard more genuine customers more quickly with precise, high-confidence identity confirmation
Current onboarding processes that don’t support Digital IDs rely on aggregating multiple data points (such as using utility bills to verify an address or governmental records to confirm age) to estimate identity confidence probabilistically. This means you ultimately conclude that the person is most likely who they say they are.
In contrast, Digital IDs connect directly to issuing authorities and use authoritative, digitally signed credentials to confirm with a very high degree of certainty that the identity is genuine and active. Because the identity data comes from the trusted source itself, this deterministic type of verification helps reduce guesswork and catch fraudsters faster.
Instead of worrying if a person really is who they claim to be and pouring significant resources into document verification, you can spend your time and energy assessing the person’s trustworthiness and risk signals instead. This can help return more accurate trust scores, which might increase match rates and enable you to onboard more genuine customers.
3. Reduce fraud risk with more secure identity checks
Digital IDs provide a more secure way to verify identities and reduce fraud risk because they are cryptographically signed, tamper-proof, and issued by authoritative sources.
To onboard without a Digital ID, customers have to upload documents, which can be altered by fraudsters, or photos, which can be edited or deepfaked for purposes like identity theft. But the robust identity binding offered by Digital IDs limits impersonation because verified identities are securely linked to digital actions and credentials.
What’s more, Digital IDs often use device-level authentication as an added layer of security. For example, in order for a customer to consent to sharing data requested by a business, the digital wallet that holds the ID may require the customer to use facial or fingerprint recognition technology that’s built into their phone, such as Face ID or Touch ID on Apple devices.
4. Unlock agentic AI securely with consented digital identity data
Agentic AI – an advanced form of AI that acts autonomously rather than relying on human prompts – is now beginning to emerge in industries like ecommerce, travel, and customer service.
Agentic AI can, for example, search for dresses for a user based on their size and preferences, compare available options and make a purchase with minimal or no manual inputs from the user. This automation might one day deliver a smoother shopping experience for end-customers and possibly increase conversion rates for businesses.
The challenge with agentic AI is that it can lead to more fraud and chargebacks because it’s difficult to prove a customer has authorized a bot to make a purchase on their behalf.
Digital ID-backed consent flows can make this process more secure by ensuring that consent is verifiable and non-repudiable. This can be done via cryptographically bound credentials, which link a person’s identity and data uniquely to their specific device, biometric user presence, and wallet-level authorization.
How does Digital ID adoption differ in the US and Europe?
In the US, Digital ID adoption is fairly limited. However, about 20 states currently offer a digital mobile driver’s license (mDL). These Digital IDs are delivered in a variety of ways, including via Apple, Google and Samsung wallets in states like Georgia and Maryland or through a state-issued app, as is the case in states including Alaska, Louisiana and Utah.
While private companies aren’t currently required to accept Digital IDs, businesses should still pay close attention given the growing availability of mDLs in the US and the increase of Digital ID adoption worldwide.
And in certain sectors, Digital IDs are already being used to streamline identity verification: in travel, for example, mDLs are accepted by the Transportation Security Administration (TSA) at select airports. In retail, they’re used to verify age for fans in some sports stadiums, and in financial services, they may even be used to open bank accounts. This is most likely only the beginning – eventually, customers may come to see Digital IDs as the norm and expect to be able to use theirs for verification purposes.
Europe is taking a more regulatory-driven approach. Through regulations such as eIDAS 2.0, governments are actively mandating Digital ID adoption. To comply, member states must offer at least one digital wallet to residents by December 2026, and businesses must accept Digital IDs by Jan. 1, 2027.
In fact, many countries already offer their citizens the option to use a Digital ID, including Estonia, Denmark, and Austria.
How to prepare your business to accept Digital IDs
- Stay up to date on regulations: In addition to Europe’s January 2027 deadline for Digital ID acceptance, other geographies across the globe are actively considering mandating Digital ID acceptance, such as the UK. If you operate in – or plan to operate in – a country that introduces a regulation mandating Digital ID acceptance, you must comply, or you’ll be faced with potential financial penalties, legal action, and reputational damage.
- Start testing Digital ID workflows early: Early testing and integration of Digital ID acceptance helps avoid last-minute scrambling and gives your business a competitive advantage because you’ll be able to discover and resolve issues before any regulation deadlines. You’ll also benefit from smoother onboarding and regulatory approval than those who wait until the deadline to implement Digital ID acceptance into their onboarding. Late adopters risk operational disruption and falling behind competitors who’ve already started testing.
- Partner with an all-in-one global KYC provider that offers Digital ID verification already: Staying up to date with varying Digital ID formats and regulations across jurisdictions is time-consuming and resource-intensive. That’s why it makes sense to work with a provider that enables you to accept the Digital IDs that are available today and new ones as they get rolled out. The provider should also maintain the connections for you so your team doesn’t have to build the technical integrations. This will allow you to enter new markets more easily without compromising compliance or draining resources.
How GBG helps businesses accept Digital IDs for faster, more secure customer onboarding
We’re a global identity technology company with more than 30 years of experience in the identity verification space. We offer identity document and biometric authentication in more than 195 countries, as well as 80 global identity, risk and fraud protection modules, from address and age verification to liveness detection or sanctions screening.
Our Digital ID module supports a wide variety of ID schemes globally, including government- and bank-issued eIDs, mDLs, and private-sector credentials. Through a single API, we enable companies to accept IDs from many countries, including BankID in Sweden, Singpass in Singapore, Louisiana’s LA Wallet, and more.
Here are three reasons businesses choose to work with us:
1. Accept Digital IDs of all types around the globe with GBG Go
Two billion people throughout the world are already using Digital IDs – and in many countries, Digital IDs will soon be expected or mandatory, making it essential for businesses to accept them as a valid proof of identity within the onboarding flow.
With our solution, you only need to integrate once to start accepting trusted digital credentials from around the world directly within your online flows and add new ones when they become available. The platform also enables you to A/B test different workflows to ensure incorporating Digital IDs doesn’t negatively affect your conversion rates.
What’s more, you can provide customers the option to fall back to more traditional verification methods, like scanning a physical ID, to minimize drop-offs. By allowing Digital IDs to sit alongside your existing processes, you can offer a tailored, regulation-ready customer onboarding experience.
2. Future-proof your KYC onboarding against shifting regulations with a team of regulatory experts on your side
Digital ID regulations and formats are shifting rapidly, and staying on top of all the regulatory changes can be resource-intensive.
By integrating with our platform once, you’re set up for compliance both now and in the future. The platform is aligned with evolving regulations like eIDAS 2.0, and it’s interoperable, meaning it can make use of data and ID formats across jurisdictions.
Even if you’re only operating in a market like the US where you technically don’t have to accept Digital IDs at the moment, you still may want to prepare yourself to accept them down the road. When you decide to expand into a market requiring Digital ID acceptance or when Digital ID use becomes more widespread in the US, integrating with our GBG Go solution now means that you’ll be ready to do so quickly by configuring the model in our platform in just a few steps.
3. Access all KYC elements through a single, unified platform with dynamic routing and global datasets already in place
Our capabilities go far beyond digital identity verification – in fact, our solution is a unified KYC platform that brings all necessary KYC components together in one place, from document authentication and biometrics to screening and ongoing monitoring.
We also support real-time dynamic routing: your onboarding flows can automatically adjust based on factors like the customer’s jurisdiction, risk level and verification results. This means you can tailor the onboarding flow based on your needs in specific jurisdictions, which is beneficial both for Digital IDs and for KYC efficiency overall.
Here’s how you can simplify onboarding with Digital IDs within the GBG Go platform:
1. Add the Digital ID module into your verification flow in GBG Go.
2. Offer Digital ID verification as an option to your customer during onboarding.
3. Guide your customer through the process, for example by enabling them to scan a QR code to use their Digital ID.
4. Let the customer know their ID has been verified and continue to the next steps.
We also have extensive global data reach that spans 195 countries and includes more than 80 identity fraud protection checks. Our global data network covers hundreds of trusted datasets, and we perform 800 million identity checks per year for more than 20,000 customers.
Even if you’re not using Digital ID verification for certain countries and customers, you can still rely on our solid databases to verify individuals accurately and increase your match rates.
How GBG helped an online gaming company go live in Italy and meet compliance regulations through Digital ID verification
An online gaming company wanted to expand into Italy and needed to meet the country’s Legislative Decree No. 41/2024. Under this regulation, players must be properly identified using either a valid identity document or a Digital ID, and all verification processes must comply with Italy’s personal data protection regulations.
Additionally, ongoing compliance checks are performed by the Customs and Monopolies Agency, with penalties such as suspension of collection for non-compliance.
We worked with the gaming company to test Digital ID workflows that aligned with Legislative Decree No. 41/2024, and now the company is live in Italy and able to onboard more legitimate customers.
Start accepting Digital IDs to enhance your customer experience and reduce fraud with GBG
By adopting Digital IDs now, you can deliver faster onboarding, stronger fraud prevention and a smoother customer experience – all while remaining compliant with current and future regulations.
In our GBG Go platform, which brings together authoritative identity data, global coverage and seamless orchestration through a single API, Digital IDs sit alongside your existing processes so that you can offer customers a smooth onboarding experience.
We make it easy to improve your identity verification process with Digital IDs. Learn how by requesting a demo today.
FAQ: Digital ID verification
No. Most businesses will support hybrid KYC, offering Digital ID verification as a fast path but keeping more traditional document and database checks as fallback methods until adoption is more widespread.
Digital IDs reduce impersonation and synthetic fraud by validating information directly against an issuing authority using credentials that are verified as authentic using encrypted communication. Additionally, Digital IDs use device-level authentication, such as requiring the customer to use Face ID to consent to sharing data, as an extra layer of security.
Agentic AI systems require a verifiable way to know who they’re acting on behalf of and that the user has provided consent. Digital IDs can provide this by utilizing a cryptographically signed consent token and proof of user presence, typically with biometric verification or a secure PIN.
