What Are Digital ID Cards? Can My Business Legally Accept Mobile IDs?

Digital ID Cards: The Ultimate Guide

Forget physical driver’s licenses. The future of age verification is already in most people’s pockets.

We’re not talking about flimsy ID cards anymore. Digital IDs, also known as electronic IDs or mobile driver’s licenses, are revolutionizing age verification. These secure, encrypted versions of your customer’s identity documents live on their smartphone, readily available for businesses to verify with ease.

Many states already offer mobile IDs, and their acceptance is rapidly growing. Businesses in these states can leverage this secure technology to streamline age verification.

Uncertain about accepting mobile IDs? Not sure if you can legally accept digital ID cards?

Our comprehensive guide dives deep into the mobile ID trend, providing clear guidance on next steps and legal requirements for businesses. Don’t get left behind – ensure you’re equipped to handle the future of age verification. Read our guide!

What Are Digital ID Cards?

Let’s unpack the concept of digital IDs and mobile driver’s licenses.

Imagine a secure version of your driver’s license stored safely on your smartphone. That’s the essence of a digital ID. You might hear them called mobile driver’s licenses (mDLs) or electronic Ids. Yet, no matter what they’re called, the idea is the same: It’s a digital document containing your verified identifying information, issued by a trusted source like your state’s Department of Motor Vehicles.

mDLs and digital ID cards typically include details like your name, photo, date of birth, and driving restrictions. They’re used for verifying age in-store or online or your identity when applying for a loan. They may even be an accepted form of ID by law enforcement.

One key benefit of mobile IDs: In some states, users can share only personal details (like their age and photo) to get age verified. This provides an extra layer of privacy for individuals.

What States Accept Digital IDs?

According to Government Today, more than a dozen states have implemented digital ID programs, including Colorado, Louisiana, and California. However, even states without a program have started to research feasibility.

In other words, digital ID cards are becoming increasingly common. Most businesses should start preparing to accept these digital forms of identification.

How does mDL work?

Although programs vary by state, the idea is similar. These states typically develop their own mobile driver’s license app, or they allow you to connect with Apple Wallet or Google Wallet to store your ID.

Some examples include:

  • myColorado – A state-issued digital ID card, which has been downloaded by more than one million Coloradoans. myColorado IDs can be used in dispensaries, to purchase age-restricted products, in restaurants and bars and in governmental agencies.
  • Louisiana Wallet – One of the first mobile driver’s license programs, which is now accepted by the TSA.
  • Arizona Mobile Driver’s License (mDL) – Available in Apple, Google, and Samsung wallets, along with the state’s digital ID app, Arizona mDLs can be used in place of a physical ID.

How Do Digital IDs Work for Businesses?

How Does Digital ID Work

Digital IDs are a relatively new technology. The process to accept mobile driver’s license will vary based on your location and state requirements. Here’s a general breakdown:

1. Obtaining a Digital ID

Customers interested in using digital IDs will need to obtain them through their state’s Department of Motor Vehicles (DMV), assuming their state offers the program.

The DMV will likely have an application process to verify the user’s identity and issue the digital credential.

However, there might be the option to use a third-party verification app like FTx Identity (more info below). Check your state issuing authority’s guidelines to determine if you can accept third-party digital IDs.

2. Verification for Businesses

To accept digital IDs, your business might need to utilize a specific app provided by the issuing state or a third-party verification service. These apps will allow you to scan the customer’s digital ID and verify its authenticity with the issuing authority.

However, accepting a mobile ID may not require special technology. Verifying a Colorado Digital ID requires the business owner to only inspect the ID and/or scan the barcode.

Can My Business Accept Digital IDs?

Can My Business Accept Digital IDs?

This is a crucial question for business owners considering accepting digital IDs. But here’s a short answer: It’s up to you.

If your state allows mobile driver’s licenses, you aren’t legally required to accept them. However, you might consider it if more of your customers begin to use them for age verification. Here are some things to think about:

  • Limited Adoption by States: As of today, digital ID programs are still in their early stages. Only a handful of US states have launched official programs, and acceptance is primarily within those issuing states. There’s no central system yet, so wider national recognition might take time. For example, it’s unlikely that you could use a California mobile ID, if you were on vacation in Kansas.
  • Business Choice: The good news is that businesses are not mandated to accept digital IDs everywhere. You have the flexibility to decide if and when to integrate them into your verification process. Here are some factors to consider:
    • Benefits: Faster verification times, potential for increased security, and catering to a tech-savvy customer base.
    • Wait-and-See Approach: You might choose to wait for wider adoption and clearer regulations before fully integrating digital IDs.
  • Future Outlook: While acceptance is limited today, digital IDs are a promising technology. As they become more prevalent, businesses that embrace them might gain a competitive edge in terms of efficiency and customer experience.

Will the Digital ID Cards Become Mainstream?

This is an important question, and to date, many individuals remain skeptical of storing documents on their phones. In Florida for example, their state’s mobile ID program has been slow to grow, while Louisiana’s mobile ID program was much faster to grow.

Therefore, many businesses are taking a wait-and-see approach. However, we recommend that businesses that cater to younger audiences and that sell age-restricted products should look to upgrade systems and prepare.

This audience is much more likely to go “wallet free” and store documents and payment options on their phones.

Are Third-Party Digital IDs OK to Accept?

Many companies specialize in digital identity verification and may offer digital IDs that businesses can accept as valid forms of identification. For example, FTx Identity offers online and in-store verification services.

Here’s how FTx Identity works:

Your customers can verify themselves in the FTx Identity app. Then, create a QR code to use for age checks at your business. This is essentially a reusable ID credential that provides a fast, convenient way for ID checks in your store.

Why Consider a Third-Party Digital ID System?

Third-Party Digital ID System

You might use a third-party provider for your business for a few reasons:

  • Ease of Integration – State-created mobile driver’s licenses programs typically aren’t designed to integrate with your POS, ecommerce or loyalty program tools.
  • Omnichannel Selling – If your business sells in a brick-and-mortar and online, a third-party solution can help you bridge the gap, allowing you to verify customers online or in-store with one digital ID.
  • Enhanced Security – Most state-issued mDVs are highly secure. However, many third-party systems may offer advanced encryption or security features.
  • Across States – If you operate multiple locations across different states, a third-party digital ID system can help you provide continuity for your customers and staff and use a single system for verifying IDs.

Third-Party mDVs: Key Considerations

Third-Party mDVs

Although third-party digital ID systems provide benefits for businesses, it’s important to consider potential drawbacks of these systems:

  • State Laws and Regulations: States have different laws regarding acceptable forms of identification for age verification purposes. Some states explicitly allow the use of digital IDs, including mDLs, while others may not have updated their regulations to accommodate digital forms of identification.
  • Validity and Acceptance: Generally, for a third-party mDL to be accepted:
    • It should meet the same criteria as a physical driver’s license issued by the state, including authentication, security, and reliability.
    • Businesses should verify the authenticity of the mDL and ensure it complies with applicable state laws and regulations regarding age verification.
  • Risk and Liability: Businesses must consider the risk and liability associated with accepting digital IDs. They may need to verify the identity and age of the individual more rigorously compared to traditional forms of identification to mitigate potential risks of fraudulent IDs.
  • Industry Standards: Some industries, such as alcohol and tobacco sales, have stringent regulations for age verification. Businesses in these sectors may have specific guidelines or requirements regarding acceptable forms of ID, which may influence their decision to accept third-party mDLs.
  • Legal Precedents and Guidance: Depending on the state and industry, there may be legal precedents, guidelines from regulatory authorities, or industry best practices that dictate whether businesses can accept third-party mDLs for age verification.

Ultimately, if you sell age restricted products online and in-store (like vape products or alcohol ), a third-party system can help you design a better omnichannel customer experience.

Wrapping Up

The world of age verification is undergoing a digital transformation. Digital IDs and mobile driver’s licenses offer a glimpse into the future, promising a more secure and convenient way to verify customer identities. While widespread adoption is still on the horizon, businesses that stay informed and consider integrating digital IDs might gain a competitive edge.

Here are some resources to learn more:

  • Your State’s Department of Motor Vehicles (DMV) website: Check if your state offers a digital ID program and how businesses can participate.
  • Industry Associations: Retail and restaurant associations might provide resources and updates on digital ID adoption within your industry.

By staying informed and exploring the possibilities, your business can be prepared to navigate the evolving landscape of digital identification. If you’re interested in a third-party ID verification solution built for retail and ecommerce, demo FTx Identity today.

Tags:
  • Digital ID
  • Digital ID Cards
  • Digital ID Programs

FAQs

Digital IDs are designed with security in mind. They often utilize features like encryption to protect user information. Additionally, users typically have control over what information they share during verification, minimizing data exposure for businesses.

This is a valid concern. As a business, you can establish backup verification methods alongside digital IDs. For example, you could allow customers to present a physical ID if their phone is unavailable.

Currently, accepting digital IDs is optional for most businesses. However, regulations might change in the future as mDV technology becomes more widespread.

The cost of accepting digital IDs is typically minimal for businesses. Verification apps might have subscription fees, but they're generally affordable.