Mobile Commerce

Gaining Good Customers Using Mobile ID Verification

“Take a picture; it’ll last longer.” Turns out that might also apply to a bank’s opportunity for doing business with online customers. In discussing her company’s new Photo Verify product, Sarah Clark, VP of Product at Mitek, shares with MPD CEO Karen Webster how incorporating ID verification into lots of banking use cases can increase customer acquisition.

According to a recent webinar hosted by mobile capture and identity solutions provider Mitek, 70 percent of likely checking account applicants say they would prefer to submit a digital application. While digital account openings via desktop computers are on the decline, mobile account opening attempts are on the rise — and this shift is leading to a missed opportunity for many financial institutions, since only 20 percent of U.S. banks currently offer mobile-optimized account opening.

Central to any bank account application process is, of course, identity verification — and that requires a photo ID. While presenting one is rarely an obstacle during in-person applications, it’s a very different story for the growing number of consumers who wish to apply via mobile. The inability for those mobile applicants to prove their identity can lead to them abandoning the process entirely.

How can a consumer provide his or her driver’s license or state ID in a secure and authenticated manner without being present? Mitek has a way — and it’s called Photo Verify.

Photo Verify Advanced — which is the U.S.-based offering of Photo Verify — uses Mitek’s MiSnap auto-capture capability. Similar to the process of capturing a check on mobile banking apps, the Photo Verify Advanced user holds their driver’s license in front of their mobile device, and the image is captured in a process that is only a few seconds long.

Having been built by Mitek, along with a partner that prints the majority of driver’s licenses and state IDs in the U.S., Photo Verify Advanced also relies upon advanced computer vision to instantly find and decode an encrypted security feature hidden on a driver's license that proves that a license is 100 percent authentic.

The solution is “very powerful,” Sarah Clark, VP of Product at Mitek, tells MPD CEO Karen Webster, “because when it does read that [a license is] authentic, it's an absolute result. There's no such thing as a false positive; it's tamper-proof.”

Therefore, Clark continues, “it adds tremendous value in terms of customers who are trying to say ‘yes’ quickly, where they can offer a great mobile user experience, but also get great value in terms of the quality of the authenticity result.”

She provides Webster with a number of use cases for Photo Verify, an important one to Mitek currently being customer acquisition for a financial services provider.

“We are working with the market on a pain point that exists with respect to traditional identity verification providers,” says Clark. “Generally, your identity is verified through a credit bureau based off of the data that you input and questions that you may answer. There's a gap that can range from maybe 10 to 15 percent up to as high as 40 to 50 percent of applicants trying to onboard who cannot have their identities verified through these traditional means.”

“In those cases,” she goes on to say, “it's very common for the financial services provider to either be forced to reject the application, or instruct those customers to come into a location to show ID, or use a scanner and scan an email as their document. Being rejected is obviously terrible, and the latter two are very high-friction alternatives.”

Allowing the customer to use a mobile app to scan his or her driver’s license, Clark attests, removes that friction while still providing a more secure method of identity verification.

Mitek is also working with the market to incorporate Photo Verify in certain high-risk use cases.

“A transfer of funds, for example, will sometimes hit certain limits that require another factor of authentication,” Clark observes. “Showing ID is something that can be very effective [in those instances]."

Sharing that Photo Verify is currently used by “a major payments processor,” Clark explains that it uses the solution in instances when its customers reach a certain threshold requiring a “higher level of ‘know your customer.’”

“Once they've transacted to a certain level,” Clark tells Webster, “they need to verify the identity more deeply with an ID document. Again, instead of making that customer go into a physical location or do something that's more clunky and less secure, like scanning, something like Photo Verify Advanced can just allow those customers to scan and clear that requirement.”

Another type of high-risk transaction where Mitek sees potential for Photo Verify is the provisioning of the credit card to the mobile wallet.

“It's the same type of question,” Clark elaborates. “If the existing risk-assessment waterfall approach creates a risk factor where the credit card issuer wants additional confidence that the person attempting to provision a card to a mobile wallet is the person that the card belongs to, again, scanning and instantly authenticating their identity document may be an extra step for that set of end users, but it may be necessary to have the confidence to allow them to then freely use that card.”

Although Mitek has historically been focused on financial services, Clark adds that the company is exploring the possibilities of Photo Verify in the merchant ecosystem — particularly in the realm of card-not-present payment transactions.

“If there's a high-risk purchase, maybe for a digital good,” posits Clark, “and a merchant wants to be absolutely sure that you are the person that matches the credit card you're using, something like instantly authenticating that you're holding a driver's license that matches that credit card is a very powerful way to do that.”

Given that money transmitters could be considered, in addition to financial services, as “kind of the ultimate digital goods merchant,” that’s a sector where Clark says Mitek sees an interest in a product like Photo Verify. The company is also considering extending it to merchants that are selling gift cards or other digital goods, who are obviously subject to more fraud than those that ship physical goods.

“The second part of the story,” Clark tells Webster, is that Mitek — separate from Photo Verify Advanced with U.S. driver’s licenses and state IDs — also supports Photo Verify across passports and 3,500 global identity document types.

“It uses a slightly different type of underlying technology,” she explains, “but the core value proposition and user experience is the same. You capture an image of an identity document and our product does an analysis as to the authenticity of it.”

On Wednesday, Nov. 18, at 1:00 PM, PYMNTS will be hosting a webinar that will take a deep dive into the motivations and technology behind Photo Verify, as well as how FIs are using it to increase customer acquisition – and retention.

Click here to register.



Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border.

Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.