NFC Technology: Doing a Solid for Digital Identity Verification
Automation enabled by smartphones has made our everyday tasks significantly easier and faster. They have brought about a vast range of applications that have benefited the entire world. NFC technology is one of these applications. Smartphones packed with near-field communication technology are increasingly being employed for online identity verification in combination with AI-powered document authentication and biometric technologies.
Moreover, across various industries, the customer onboarding process has shifted from fingerprint scanners to contactless technologies. So, this article will explore the developments in technology in response to current demands in the identity verification space. Furthermore, we will discuss the working of NFC-based ID verification and why it is a perfect fit.
The Significance of Identity Verification
By 2025, the global ID authentication market is expected to have grown from $7.6 billion in 2020 to $14.8 billion. This upward trend points to the question as to why it is of such pertinence. Well, if a business fails to correctly validate their consumer’s identity, they risk allowing criminals into their system. When this unfortunate event occurs, the same business comes under gross breach of KYC/AML rules, resulting in fines and penalties.
Moreover, businesses also face the threat of chargebacks and subsequent monetary losses.
The NFC verification, however, makes the customer onboarding experience sufficiently secure for both the end-users and the businesses. As a result, businesses are assured that their KYC/AML regulations are adhered to so that they can concentrate on business growth.
How Businesses Were Onboarding Customers Previously?
Identity authentication, whether manual or automated, was heavily reliant on traditional identification cards. In the manual verification process, users had to go to the verification venue, and an official from the organization would verify if their identity information was legitimate or not. Even in the digital ID authentication process, criminals found cunning ways to digitally defraud organizations. In this process, Optical Character Recognition (OCR) was heavily relied upon to extract the information from the ID document. The accuracy rate of OCR data extraction was around 90%.
Because of the technology available, the aforementioned digital ID authentication procedure was sufficient and appropriate. However, the introduction of chip-based identity cards – compliant with ICAO 9303 – has prompted an improvement in the process, and a better one indeed. These e-identity cards have an NFC chip that holds data printed on the document.
What Makes NFC the Right Fit?
When employing a technology, access and reliability present themselves as the two most important factors. Well, the security, efficiency, and reliability of the NFC identity verification tools lie in the fact that the NFC chips’ data is digitally signed and encrypted. Moving on, the number of mobile users worldwide is estimated to exceed 4.3 billion by 2023. According to reports, there are approximately 2 billion NFC-enabled devices today. The majority of these gadgets are smartphones.
This suggests that NFC technology is currently being used by more than 20+% of the world’s population. Furthermore, the global NFC market’s value is projected to hit $47.3 billion by 2024, according to Statista. So, the above-mentioned statistics readily eliminate any qualms one may have about access to this technology. Thus, it comes as no surprise that NFC-based technologies are used for digital ID verification.
The Run-Through of NFC-Based ID Authentication
In the NFC-chip-based authentication process, an end-user needs only an NFC-installed smartphone and that’s it. The step-by-step run-through of the NFC identification process is as follows:
1. Firstly, the user submits a photograph of an NFC-enabled identification document.
The user can also use the smartphone’s camera to take a real-time snapshot of the document.
2. After that, the system examines the document’s Machine Readable Zone (MRZ). The validity of the MRZ portion is checked before the data is retrieved.
3. For NFC-chip scanning, the user touches the chip-based identification document on the smartphone.
4. Then the information retrieved from the identity card and the data extracted by the NFC reader is compared. Besides, the data obtained from the NFC chip is shown on the user’s screen.
Wrapping it Up
NFC-enabled smartphones are used by more than 20% of the world’s population. As a result, more ID authentication solutions are incorporating this technology into their services.
Moreover, the abandonment rates during the customer onboarding process are reduced, and subsequently, user experience is improved, thanks to NFC ID authentication.
