2022 Year in Review: ID Scanning & Compliance + IDScan.net Company Updates
Happy Holiday! First, a sincere “thank you” to our customers and partners who have helped make 2022 our best year yet!
Here’s a quick year in review of the most important news stories of the year, and some of our company highlights!
2022 Identity Verification Trends
The global identity verification market is currently valued at $8.43B. It is expected to grow to $32.94B by 2023, increasing at a CAGR of 16.35% over that time. COVID-19 continues to help accelerate digital account opening and the need for contactless onboarding processes. Additionally, the increasing frequency of identity theft and identity-related fraud is driving businesses to increase their spend on identity verification services. Though large enterprises account for 68% of global spend on identity verification services, small business investment in the vertical is also growing, as scammers are targeting vulnerable businesses with smaller IT and cybersecurity budgets.
Terms such as “validation” and “verification” have been replaced with the broad term of “identity proofing.” Gartner’s 2020 report on the industry established the term, but we really saw adoption increase in 2022, as firms searched for a way to define their solutions more broadly, and differentiate between “authentication” which encompasses password and device management.
Mobile Drivers Licenses (mDLs)
More than 30 states have now either launched, or are piloting digital drivers licenses. Although there is not yet a standard for these apps, they are incredibly popular due to their convenience; more than 70% of global citizens say they would like to have their identity document on their phone.
Apple is emerging as a leader with their solutions for adding drivers licenses to a digital wallet, however this raises accessibility concerns for Android users. Thales Smart ID (used by Florida) is another major player. Every conference we attended in 2022 had multiple sessions on mDLs and the future of digital identity.
Death of the magstripe
All driver’s licenses and state IDs contain multiple symbologies (machine readable technologies) which store data and can be scanned by different devices. For many years, all IDs contained magstripes, which are the big black strip on the back of the ID. Magnetic recording was first invented in 1950, and is used on credit cards, ID cards, and other cards such as hotel room keys and food stamp cards. However, with all states now currently using the PD417 2D barcode, magstripes have become redundant. Iowa, Florida, Pennsylvania, Wisconsin and Montana IDs and driver’s licenses no longer utilize magstripes, and more states are expected to follow suite.
With EMV chips largely replacing magstripes on credit cards, magstripes are quickly falling out of favor across multiple use cases. Compared to 2D barcodes, magstripes contain less data, are more easily damaged, and are easier to duplicate, thus making them a greater security risk.
The declining popularity of the magstripe also relates to a broader trend, towards machine readable technologies that can be scanned and de-coded using a mobile phone camera.
Facial recognition pulling ahead as the #1 biometric identifier
Although iris scans, voice recognition, vein mapping, and fingerprinting have all been positioned as the future of biometrics. However, facial recognition has continue to lead the way as the most popular form of identity verification. Amongst businesses, facial recognition is most popular due to the ability to face match to the photo on the ID. Thus, it does not require any specialty scans to capture an initial biometric marker.
Challenge questions are getting technical
The “challenge question” has been a mainstay of identity verification for years. They have typically been questions such as “what is your mother’s maiden name?” or “which address have you lived at?” However, now challenge questions are shifting to verify wireless providers, phone types, and browsers.
Age limits on product purchase are a top priority for legislators
The June 2022 FDA decision to deny Juul authorization to continue selling e-cigarettes is a bellwether event for the industry, coming on the heels of a change to the federal minimum age for tobacco sales. Across all states, regulations for the sale of alcohol, tobacco, cannabis, and other age-restricted products are becoming more stringent. Supplements, weight loss products, pornography, firearms, Tide pods, and other products have all been the subject of regulatory debate. The prevalence of delivery services and online purchasing only adds to the conversation, as most eCommerce stores do not have sophisticated age verification technology in place.
We predict more states will begin to expand legal verbiage around age verification for age restricted purchasing to encompass both online and offline sales, and that supplements, kratom, CBD, and additional products will start to attract attention due to their popularity amongst young people.
Biggest Identity Verification News Stories of 2022
2022’s most talked about news stories related to identity verification, age verification, biometrics, and more.
Twitter adds account verification, with no identity verification
Elon Musk’s quest to eliminate bots, promote free speech, and “authenticate all real humans” on Twitter led to an $8 account verification process with no identity verification. Hilarity ensued.
Around the world, governments are getting stricter on tobacco purchases
The highly publicized ban of Juul e-cigarettes has led to worldwide debate about the accessibility of tobacco and vaping products to minors.
Users are calling for better identity verification on dating apps to combat intimate partner violence
The online dating community has requested better vetting processes on apps like Tinder and eHarmony to keep users safe from predators and criminals.
Fred Meyer announces digital ID scanning for all alcohol purchases
The grocery chain is kicking off a trend for large retailers looking to avoid liability for sales to minors.
Identity tech firm, ID.me called out for bungled handling of IRS login via face match
The U.S. Treasury is now completely reconsidering usage of biometrics for logins to key systems such as the IRS portal.
Identity fraud doubled in crypto and banking in 2022
Payment fraud increased 20% in 2022, and ID cards are the most commonly forged document type.
Biggest 2022 ID Scanning Compliance News
Bipartisan discussion around the Improving Digital Identity Act could establish a national standard for digital IDs
New Jersey Cannabis Regulatory Commission issues last minute ID scanning requirements for dispensaries
Nevada AB360 will require ID scanning for purchase of tobacco products starting Jan 1, 2023
New York considers law to allow biometric scanning for alcohol and tobacco purchases
IDScan.net News & Updates 2022
This year was an incredible year of growth for IDScan.net. We’re excited to share some of these facts and figures with you!
We verified more than 153M identities for our customers!
72 New Formats
We added 72 new ID formats to our US library, including MMJ cards for 19 states.
18 New Employees
We added 18 new members to the IDScan.net team.
Our team traveled the country and were on-site at 24 conferences in 2022!
Other exciting IDScan.net announcements from 2022.
- We launched free shipping on all ID scanning hardware for the Continental US!
- IDScan.net was announced as the partner for Jack Henry’s digital account opening tool, Open Anywhere. Our solution verifies identity via photos of the ID and a selfie in <10 seconds.
- Our team achieved SOC II, Type II compliance
- We launched VeriScan Fingerprinting, which uses livescan devices to create .EFT files, accepted by the ATF and other government entities for background checks. .EFT file submission can reduce approval times from 18 months to 6-8 weeks.
- Director of Cannabis Business spoke on ID scanning and compliance at Cannacon Chicago.
- We launched our ID Scanning Laws Portal, now free and accessible to all – keep abreast of the latest legislation related to identity verification.
Cheers to an amazing 2022, and even more excitement in 2023!