Identity Verification or Electronic Identification? Key Differences & Uses 

In a digital-first business climate, choosing a highly secure identity solution is key for staying competitive. After all, you cannot reliably interact with your customers online if you are uncertain about their identities. That’s especially true if you operate in a regulated sector such as finance, banking, or insurance.  

Two terms often pop up in discussions about remote identification. First, we have identity verification (IDV). Then, there is also electronic identification (eID). While both refer to the process of checking the identity of the party trying to use your services, the terms do not mean exactly the same.  

Today, we’ll dive deeper into these two concepts. Moreover, we’ll see how they differ from one another and what the ideal use cases for each are. This way, you can make an informed decision about the type of solution that best suits your business needs. Let’s begin! 

What Is Identity Verification (IDV)? 

The term ‘identity verification’ (IDV for short) simply refers to the process of verifying who someone is. This helps confirm that their identity matches who they claim to be. 

Identifying people and organizations accurately is commonly part of AML (anti-money laundering) legal requirements. That’s why it plays a central role in KYC (Know Your Customer) procedures. There, its function is to prevent fraud and the funding of terrorism. 

There are many ways of conducting identity verification. The process typically involves scanning and checking identity documents such as ID cards or passports. It also usually asks for biometric data (facial recognition, fingerprints). Sometimes, this information may also be compared to the relevant databases, such as official registries. 

What Is Electronic Identification (eID)? 

Electronic identification is the name of a qualified trust service defined in the eIDAS Regulation. During this process, officially recognized digital means (eID schemes) are used to verify identities online. 

The European Commission strictly monitors who can carry out this identification. It also maintains a list of approved eID schemes. What’s more, notified eID schemes such as Evrotrust can be used to identify persons and organizations across the entire European Union for cross-border operations. (Note: Non-notified eID schemes are only valid in the issuing country.)

Some eIDs are government-issued digital IDs that may be cards or apps with secure authentication (PKI, certificates). Evrotrust is an example of a private company approved by the government to issue trusted, reusable digital identities via our mobile app.  

In our case, the initial issuance of the eID includes steps you can see in IDV solutions. It begins with scanning an official ID document and going through a liveness check (biometric verification). We also cross-reference these data with authoritative registries. However, we take security one step further by also manually supervising each initial registration in the Evrotrust app.  

      Ready to integrate Evrotrust’s eID into your workflows? Get in touch so we can find the most suitable solution for your business! 

So, What Is the Difference Between Identity Verification and Electronic Identification? 

In terms of the technological steps in IDV and eID, there is an overlap. However, electronic identification is more thorough and is more legally sound as far as the EU goes. 

You can think of identity verification as the broader term for the general process of confirming identities online. Many methods exist under this umbrella. On the other hand, electronic identification is a specific, tightly regulated way to confirm identities in the European Union.  

In simple terms, electronic identification is part of the identity verification field, but not every IDV solution is electronic identification. Only eID schemes issued by governments or officially recognized trusted third parties count. 

The Regulatory Landscape in the EU 

As mentioned above, the legal requirements for eID are defined in the eIDAS Regulation. Meanwhile, the legal framework surrounding IDV is less clearly defined. Different acts may apply to different IDV solutions since the field is so broad. 

eID Is Regulated by eIDAS 

The main advantages of electronic identification under the eIDAS framework are robust security and EU-wide legal recognition for notified eID schemes. These schemes benefit from mandatory mutual recognition within the EU, which helps simplify cross-border transactions and access to online services.  

Thanks to the EU-wide validity of eID schemes, the public sectors of each member state can operate as one unified space. This way, EU nationals can use any approved eID scheme to identify themselves in front of a government agency in other member states. For example, they can check for any outstanding taxes they owe, and more.  

Moreover, the legislation defines three different assurance levels: low, substantial, and high. Every eID scheme available has one or more assurance levels assigned to it according to the same criteria.  

As a result, businesses and organizations can pick eID solutions according to their needs. Sensitive transactions may demand at least a substantial level of assurance. Similarly, low-risk, daily internal operations may be performed even at a low assurance level.  

This classification creates more transparency and gives organizations flexibility in their workflows. They can save costs by using cheaper, low-assurance methods for low-risk transactions and avoid non-compliance fines by picking more secure solutions for their sensitive processes. 

The cross-border validity of electronic identification is also key to budget optimization. Businesses can safely operate in the entire EU without looking for a local solution in each member state. 

Identity Verification Requirements 

On the other hand, the legal framework for IDV varies widely due to the different solutions in this category. This variability has both pros and cons. It offers more flexibility, but it can also cause confusion. Businesses may not be sure about compliance coverage. 

IDV solution providers are typically guided by sector-specific regulations. For example, financial businesses must follow AML directives. This means they have to look for IDV solutions that openly state they are AMLD-compliant. 

In other words, not every single identity verification product has the same regulatory compliance. On the other hand, all eIDAS-approved electronic identification solutions are compliant by default, removing any ambiguity from the equation. 

When picking an IDV solution, businesses must look for the specific certifications each solution comes with. You can look for ISO or ETSI standards that the product in question complies with, if available. 

Legal Liability 

One of the most important distinctions between eIDAS-approved eID schemes and general IDV solutions is who bears the legal responsibility for the identification. 

With identity verification technology, there is a lot of variance. Most solutions leave the legal liability for identification up to you. This means your business is liable if the IDV solution identifies a person or organization incorrectly.  

That is not the case when using electronic identification by eIDAS-approved national or private eID schemes. They guarantee that your business is free from legal liability for identification.  

For instance, Evrotrust is liable for the identifications performed via our eID service. That is because eIDAS recognition means the reliability of our services is guaranteed by the European Commission.  

We undergo regular audits to ensure we meet all standards and regulations. Plus, our company is both a qualified trust service provider and a notified eID scheme. With our eID solution, you receive a qualified identity attestation signed with QES.  

The outcome of our electronic identification is fully compliant with all applicable regulations. Moreover, it has the highest assurance level, with validity in the entire European Union – which isn’t necessarily guaranteed by generic IDV providers. 

IDV vs. eID Differences Illustrated 

The Future of Identity Verification 

Thanks to new rules in Europe like eIDAS 2.0 and clearer guidelines for identity checks, eID schemes are now easier to use for remote identity verification. In the past, private companies offering identity verification and government-issued eIDs were separate options. Now, they often work in the same space, with eID schemes becoming more common. 

Moreover, the upcoming EU Digital Identity Wallet will bridge the gap between eID schemes and cross-border identity verification. According to the legislation, each EU member state must have at least one EUDI wallet solution by the end of 2026. National wallets will be interoperable and legally valid in all the EU, largely reducing businesses’ need to look for third-party IDV solutions. 

Check out our EUDI Wallet webinar to learn how it will co-exist with other methods for remote identity verification and how you can prepare your business for the changes it will bring.