Mobile driver’s licenses (mDLs) and your business

The iPhone, which is largely credited with kicking off the smartphone revolution, was released in 2007. In the 15 years since, smartphones have gone from expensive novelties to fashion statements to necessities of modern life. Smartphones have replaced landlines, desktop computers, calculators, alarm clocks, cameras, maps, GPS devices, debit and credit cards, and so much more.

Today, thanks to the development of mobile driver’s licenses (mDLs), they may be one step closer to fully replacing our wallets.

But mobile driver’s licenses aren’t just convenient for the end user. Businesses that need to verify the identity and age of their customers or users can also benefit from the widespread adoption of mDLs, as they have the potential to reduce friction and boost conversions during the verification process.

Below, we take a closer look at what exactly mobile driver’s licenses are, how they work, and the use cases they may present for your business.

What is a mobile driver’s license (mDL)?

A mobile driver’s license (mDL) is a form of electronic identification that encrypts and digitally stores the information found on your physical driver’s license. It’s designed to live on a mobile device, either in a digital wallet (like ones provided by Apple or Google), or through applications specifically designed to house mDLs.

Generally speaking, a mobile driver’s license will include the same data points found on an individual’s physical license. This may include the individual’s:

• Name

• Address

• Date of birth

• License number

• Issue date

• Expiration date

• Issuing jurisdiction

• Restrictions

• Driving class

Mobile driver’s licenses are meant to supplement — not replace — physical ID cards. They can be useful in the event that an individual has lost or forgotten their physical license, as well as in situations that require identity or age verification (such as opening a bank account, purchasing a plane ticket, or making an age-restricted purchase).

Mobile driver’s licenses are also commonly referred to as:

• Digital driver’s licenses (dDL)

• Virtual driver’s licenses (vDL)

• Electronic driver’s licenses (eDL)

• Electronic IDs (eID)

How do mobile driver’s licenses work?

Mobile driver’s licenses are only available to individuals who live in states or territories that allow for their use (see a full list of states that issue and accept mDLs in the FAQs at the end of this article). In those states, mDLs are typically made available in one of three ways:

• Through a digital wallet, like Apple Pay or Google Wallet

• Through a first-party app designed for an individual state

• Through a third-party app that partners with an individual state

Regardless of which method a state chooses to use to offer mobile driver’s licenses to its citizens, they largely work in the same way.

Validating the user’s identity

Before the user receives a mobile driver’s license, their identity must first be validated by the application that will house the mDL, in accordance with both international standards as well as the requirements of the issuing state or territory.

While validation may vary slightly depending on the specific application issuing the mDL, it typically involves some combination of the following:

• Document upload: The user typically needs to scan both the front and back of their license or state-issued ID.

• Database verification: The information provided by the user is then cross-checked and validated against an issuing database (typically the state’s DMV). Sometimes, the issuing state might require additional information to complete the application.

• Selfie verification: Most digital wallets and mDL applications require the user to upload a series of selfies that must be taken in real time as they are requesting the mDL. These selfies are then compared against the photo in the ID. Additionally, the selfies are used to verify that a living person is requesting the mDL and not part of a scam or spoof.

Accessing the mDL after issuing

To access the mDL once it has been issued, the user usually just needs to navigate to the “IDs” section within their digital wallet or open the mDL app that stores it.

The user will need to authenticate their identity by entering a pin or password, or through a face- or fingerprint scan. This authentication must take place any time the individual wants to access or share their mDL.

If the user decides to share the data held within their mDL with a third party (such as a business or government agency) they will be given the opportunity to review the information that will be shared.

The business case for mobile driver’s licenses

Any business subject to Know Your Customer (KYC) and anti-money laundering (AML) requirements can benefit from leveraging mDLs as a part of their eKYC processes.

Of course, this includes traditional financial institutions such as banks, lenders, and insurers, as well as non-traditional institutions such as fintech companies, cryptocurrency exchanges, decentralized exchanges, and more. But it also includes businesses that are not directly subject to KYC requirements but which must verify their customers’ identities or ages for other reasons — such as in the case of age-restricted commerce, travel and hospitality, marketplaces, and online gaming.

How? Because identity and age verification introduce friction into the buying process, and mDLs help reduce this friction.

When a user’s identity or age must be verified remotely — as might happen when they try to open a bank account through a mobile app or purchase alcohol through a website — that verification typically requires multiple steps. Each of these steps increases the likelihood that the user might become overwhelmed, worried, or frustrated enough to abandon the task they were trying to accomplish.

Age and identity verification often requires the individual to upload a photo of a state-issued ID, like a driver’s license, which might require a number of steps to complete. The user must remove the card from their wallet, ensure they’re in a location with decent lighting, and take a photo of the card. They might then be prompted to take a series of selfies on their phone to verify that they’re alive and own the ID they’re trying to verify.

While that may not seem like much to ask, each of those discrete steps gives the user one more opportunity to abandon their activity.

Mobile driver’s licenses change this calculus by reducing the number of asks you must make to your customers or users during the verification process, due to the fact that the information contained within the mDL has already been verified. Additionally, mDLs can automatically populate forms and fields with required data so the user doesn’t need to manually enter it.

Mobile driver’s licenses provide businesses with a number of additional benefits as well, including:

• Heightened privacy: Because the digital wallet controls what information is shared, you can request only the information you actually need for verification while avoiding unnecessary collection of information that you don’t need. Ultimately, this translates into heightened privacy for the user.

• Built-in biometric assurance: Most digital wallets secure the mDL with a native biometric verification such as FaceID or fingerprint scan. With this in mind, it’s possible to accept the wallet’s biometric verification in lieu of your own, which would further reduce friction.

• Reduced incidence of false negatives: There are many reasons a picture of an ID might fail verification or lead to false negatives, including poor lighting or picture quality. Accepting an mDL in lieu of a photo can reduce the occurrence of failures and false positives, as the ID has already been verified by the wallet app.

Businesses that integrate mobile driver’s licenses into their verification processes therefore reduce friction, leading to more conversions — whether that be in the form of applications, account creations, or purchases.

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Mobile driver’s licenses and your business

The world of identity verification is constantly evolving. Mobile driver’s licenses are just one tool in a long line of innovations that may empower you to better serve your users or customers while also meeting regulatory requirements.

Here at Persona, we understand how important it is for modern businesses to stay on the leading edge. That’s why we’ve integrated with the latest iOS 16 features and now allow organizations that obtain Apple’s entitlement to accept mobile driver’s licenses (mDLs) as a form of identification within Persona’s verification flow. With mDLs available in Dynamic Flow, organizations can now configure and provide better experiences with more reassurance against risk than any other provider by creating custom, granular experiences.

Interested in learning more? Start for free or get a demo today.