Michael Hagen, CEO & Founder, IDchecker: "Welcome to the future of online identification"

The global digital transactions and e-identity marketplace is seeing a great deal of developments, brought about by advances in technology and evolving consumer needs. In your opinion, which developments would you single out as very significant in the digital transactions and e-identity space?
Michael Hagen: There would be two or three such developments in the combined transactions and e-identity space that I would like to highlight – the first and perhaps the most significant being the shift from desktop computers and laptops to mobile devices and tablets. An increasingly higher percentage of users are carrying out their business or interacting online via their mobiles and tablets – all in all, this is a big paradigm shift in the way we interact with and perceive the internet. What we also see is a higher necessity for establishing trust online. Put simply, the need for users to trust one another online has grown to reflect the similar, pre-existing need to establish trust in offline contexts. This is all the more relevant since consumers are engaging in an increasing number of peer-to-peer transactions – they may be renting out their cars or even their homes to one another - and complementary services are needed to enable these exchanges and allow us to trust each other.

The next challenge for the online commerce space has to do with verifying identities in such a way that the online and offline components of a user’s identity come together and complement one another. How does IDchecker regard this emerging trend? What challenges are there to be overcome?
Michael Hagen: This is a very important trend for IDchecker, because our service makes it possible to bridge that gap between online and offline. We believe that the traditional ways of performing an online verification are unlikely to remain relevant in the long term. Currently they consist of using databases or electronic verification. Our view is that we should in fact take a step back from all this and start with very reliable data, government-issued data which can be found on consumers’ ID documents – on their passports, driver’s licenses, ID cards, etc. For IDchecker, this is the correct source to tap for user identification data. As a result, we have geared up our services to capitalize on this pool of data, in a bid to allow users to authenticate themselves online via an identity document that would normally be used in an offline situation and that can be verified and processed very quickly and with a high level of accuracy.

When it comes to challenges, the first that comes to mind has to do with the logistics of tying a document to a person and ensuring that users are who they claim they are. Adoption rates are also a challenge, given that consumers need to feel comfortable with uploading scanned copies of their documents rather than keying in all the information themselves. From what we have seen so far, consumers tend to respond well to this switch from offline to online, which admittedly does make life easier in certain circumstances.

Could you tell us a bit more about IDchecker? How does IDchecker position itself when it comes to closing the gap between online and offline identities?
Michael Hagen: IDchecker is the first cloud-based solution that offers global coverage for document verification in combination with face recognition. This solution called One Touch Sign Up will change the way we interact in our digital world.

IDchecker started out 9 years ago as an automated ID document verification company. Initially, our customers consisted mainly of HR firms and employment agencies. After a couple of years of being market leader in the Netherlands, IDchecker entered the global market for online identity verification. With the recent expansion of our product range, which now includes Intelligent Data Capture and Face Recognition, the company captured the attention of major international players such as eBay, PayPal, Western Union, LinkedIn and many others.

One of the many advantages associated with being around for such a long time is that our OCR engines have grown to be very sophisticated, which has also contributed to the growth of our customer base. Moreover, we came to know the international market very well and realized that for us to be able to offer a proper KYC experience to our customers, it was crucial to ensure that the person uploading their documents are who they said they are Face recognition plays into this very nicely, especially if we offer the infrastructure needed to carry out face recognition online. IDchecker also handles different other types of documents – proof of address documents such as bank statements or utility bills. The great thing about this technology is that it allows for an identity to be verified without a company having to connect to any external databases, since consumers upload their own photos and photos of their ID documents, and thus the confirmation of identity can take place on the spot.

During the Digital Identity conference, which was held in Amsterdam this year, you stated that “we are not an e-identity provider, but only one piece in the whole puzzle”. Could you please elaborate on that?
Michael Hagen: IDchecker has seen that it can be an e-identity services provider – we have a user’s passport, his photo, we match them and can translate it to a number or an algorithm that essentially functions as a person’s electronic ID, which is just as solid as an offline identity. However, we feel that it’s not quite realistic for a company the size of IDchecker – currently employing 35 people – to position itself as a stand-alone e-identity solutions provider. Consumers tend to put their trust in larger institutions, such as their bank or else their credit card scheme – Visa or MasterCard – and even companies such as Google or LinkedIn, which have a very strong, global brand presence and which can work in close collaboration with a trusted third-party that can host and manage all the identity data as such. IDchecker provides such services to the big brands out there in the market – and this is what I meant when I referred to our company as being a piece in the global identity verification puzzle.

What kind of companies do you work with? What would be the profile of your customers?
Michael Hagen: We are active in a series of verticals – e-commerce companies is one, another one includes financial institutions such as Bank of Scotland, Western Union or Travelex who offer either money transfer services or else online savings accounts, which by law requires that consumers provide proof of ID. We also serve companies which offer employment and pre-employment screening, and which are currently expanding into the field of telecoms, specifically mobile phone acquisitions, wherein consumers can buy their devices online while still being required to provide proof of ID.

From a consumer perspective convenience, frictionless payments and privacy are key factors for a successful e-commerce experience. How does IDchecker address these needs?
Michael Hagen: All three of these attributes - convenience, frictionless payments and privacy – are key components and have our full attention. This constitutes a change compared to a few years ago, when as a third-party service provider to bigger companies we would have little to no direct contact with the consumers. But things are evolving: we now have customers live in 39 countries and we are interacting with high numbers of consumers on a daily basis.

Offering convenience is very important for boosting adoption rates, which is why we have built mobile apps for iOS and Android, as well as a webcam solution; on top of that, we offer the ability to accept over 3,500 types of documents from 213 countries in any format – JPEG, PDF, etc. On the whole, we are trying to make our users’ lives as easy as possible, and not give them too many guidelines to confuse them – they just have to hold their cameras over their documents or else hold their IDs up to a webcam and it’s done. One challenge here has to do with discrepancies in levels of technology employed by users around the world. Some users are very tech-savvy and use the latest tools and browsers, while others still use Internet Explorer 6 or 7.

However, getting the user experience right is essential for reaching the next level – which consists of guaranteeing a frictionless payment, checkout or onboarding experience. In such contexts, when proof of identity is necessary, users tend to be pushed offline in order to provide it. We would like to keep them online and guarantee an end-to-end online identity verification and transaction process. As for privacy – as broad a notion as this is – our philosophy is that consumers should only have to provide as much information as necessary for the transaction they are carrying out.

Your company is listed among the hundred most innovative companies in Europe and has won the Red Herring Award. Can IDchecker be considered a key enabler of disruptive innovation? If so, why? What does/will trigger disruptive innovation in the e-identity space, in your opinion?
Michael Hagen: Yes, IDchecker is a key enabler of this innovation. Our service is the starting point for all the other pieces that we need to create a strong online identity. Using IDchecker means you start the verification process with a governmental issued document. To us that is the most relevant source of personal data. Then we add other data like address information with our data capture service and combine all of this with face recognition. So now we have an approved ID document, a proof-of-address and a solid link to the real person all in one check. We are the first company to do this in the online space.

According to the Security Identity Alliance, the economic future depends on e-ID. Do you agree? If so, in what way does the IDchecker service bring economic benefits to Europe and/or shape the economic future of this region?
Michael Hagen: Like I mentioned earlier in our conversation, I believe the true potential of the internet will only be unlocked if we can trust someone online like we can trust someone offline. To do that we need to think differently about our online identity, so, yes I agree with the SIA. We need to use attributes that provide trust in the real world and start using them in our digital world. That is why we develop and sell services that build trust. Once we have more trust we will see the growth of online commerce grow even faster than it is doing today. Basically we will unlock all the knowledge, creativity, entrepreneurship of more individuals because there will be no boarders, no language barriers, no physical distance to cover. Image the impact that will have on economic future of our region.

What’s next on your product roadmap?
Michael Hagen: Quite a few things, actually – the biometrics side of our offering is definitely something we will continue to work on and will launch very soon. Another element that we are constantly working on is speeding up our processes. We are not a real-time processor - it usually takes a certain amount of time to process a document. However, we are working on setting techniques in place that will allow for near-instant verification – for example, when a consumer will take a photo of a document with his iPhone, the document will be checked within a few seconds, or at least the system will recognize the type of document scanned and then proceed to read all the information off it.