Identity (ID) Verification Market to Reach USD 4915 Million by 2031, Driven by Digital Onboarding and Cybersecurity Needs | Valuates Reports

BANGALORE, India, June 3, 2025 /PRNewswire/ -- Identity (ID) Verification Market is Segmented by Type (Software, Services), by Application (BFSI, Retail and Ecommerce, Tele and Gaming, Healthcare and Transport).

The Identity (ID) Verification Market was valued at USD 2908 Million in the year 2024 and is projected to reach a revised size of USD 4915 Million by 2031, growing at a CAGR of 7.9% during the forecast period.

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Major Factors Driving the Growth of Identity (ID) Verification Market:

The ID verification market is undergoing rapid expansion as industries prioritize secure and seamless identity authentication in the digital age. With growing fraud risks, regulatory scrutiny, and demand for digital access, ID verification tools have become essential across banking, retail, healthcare, and government sectors. Innovations in AI, biometrics, and mobile-based verification are reshaping how businesses validate identity. As data privacy and compliance requirements evolve, the market will continue to see robust demand for reliable and user-friendly identity verification systems, reinforcing trust in global digital ecosystems.

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TRENDS INFLUENCING THE GROWTH OF THE ID VERIFICATION MARKET:

The services segment significantly drives the ID verification market by offering scalable, customizable, and expert-driven solutions that assist businesses in handling complex identity checks efficiently. Service providers offer identity authentication, document verification, biometrics, and compliance consulting tailored to industry-specific needs. Organizations lacking in-house resources increasingly rely on managed services for real-time fraud detection, customer onboarding, and continuous monitoring. These services also reduce regulatory penalties by ensuring adherence to global compliance standards such as KYC and AML. Additionally, third-party verification services help reduce operational burden, accelerate user authentication, and lower costs associated with manual checks. With rising identity fraud risks and evolving cyber threats, the demand for service-based ID verification models is growing across sectors like BFSI, healthcare, and e-commerce.

Software solutions are at the core of ID verification systems, enabling automated, real-time identification processes that enhance operational efficiency and accuracy. These platforms support biometric recognition, optical character recognition (OCR), AI-based facial matching, and risk scoring. Organizations deploying ID verification software benefit from seamless customer onboarding, reduced fraudulent account creation, and improved regulatory compliance. With digital transformation accelerating across industries, businesses are shifting from manual methods to software-based identity checks that are faster, scalable, and more secure. The flexibility of cloud-based and on-premise deployment models adds to its appeal. As cybercrime increases, enterprises seek robust software to authenticate identities remotely, supporting growth in sectors like fintech, remote hiring, and online education.

The retail and e-commerce sector is driving the ID verification market due to the rise in digital transactions, account-based services, and fraud prevention requirements. Online retailers and marketplaces increasingly rely on identity verification tools to authenticate users during sign-up, high-value purchases, and returns. These solutions help detect synthetic identities, stolen credentials, and fraudulent payment activity. As customers demand seamless and secure checkout experiences, e-commerce platforms deploy frictionless ID verification technologies like facial recognition, OTP validation, and address verification. Compliance with regional data protection laws also mandates identity validation to prevent misuse. The sector's rapid digital growth and increasing fraud exposure continue to elevate the role of ID verification in securing customer interactions and trust.

The rapid increase in cyberattacks, identity theft, and data breaches is compelling businesses across sectors to adopt ID verification solutions. These systems enable early detection of unauthorized access and fake credentials, reducing financial loss and reputational damage. As fraudsters leverage AI tools to create deepfakes and synthetic identities, enterprises are prioritizing advanced verification layers. Biometric authentication, behavior analytics, and AI-powered risk assessments have become integral parts of fraud prevention frameworks. ID verification acts as a frontline defense against evolving threats, and industries such as banking, insurance, and travel are witnessing rapid implementation to safeguard digital channels and customer data integrity.

Digital onboarding has become a standard in customer engagement, particularly in fintech, healthcare, and education sectors. With more services shifting online, ID verification ensures secure and swift onboarding without physical presence. This supports Know Your Customer (KYC) compliance and enhances user trust. Employers and institutions also rely on digital ID checks to validate remote candidates and students. As the global workforce becomes more mobile and distributed, identity verification solutions that offer smooth integration with onboarding portals and applicant tracking systems are in high demand. The shift towards remote-first operations further reinforces the importance of secure identity confirmation tools.

Governments and regulatory bodies are enforcing stringent rules around identity validation to combat money laundering, terrorist financing, and data misuse. Standards such as AML, GDPR, CCPA, and PSD2 require robust verification protocols during customer onboarding and financial transactions. Non-compliance can lead to substantial fines and legal consequences. ID verification tools automate compliance by capturing, analyzing, and storing identity data in secure formats. Regulated sectors like banking, telecom, and gaming are mandated to implement these solutions. As global and regional laws evolve, the demand for dynamic ID verification systems that adapt to new compliance frameworks continues to rise sharply.

The proliferation of mobile banking, digital wallets, and mobile commerce drives the need for real-time, mobile-friendly ID verification. Consumers expect secure yet seamless access to services via their smartphones. Mobile ID verification solutions use device biometrics, selfie scans, and document capture to validate identities. Fintech apps prioritize these tools to ensure fast onboarding and transaction authorization. With financial services expanding into underbanked regions through mobile apps, identity verification becomes essential to extend access while minimizing risk. The growing ecosystem of mobile-first services is pushing ID verification vendors to innovate lightweight, API-driven mobile verification capabilities.

The healthcare industry increasingly requires ID verification to ensure secure access to patient portals, protect sensitive health records, and comply with HIPAA and related regulations. As telemedicine and online prescriptions become mainstream, verifying a patient's identity is critical to preventing fraud and unauthorized access. Healthcare providers also use ID verification for secure billing and insurance processing. The integration of biometric checks and document authentication in patient onboarding workflows enhances accuracy and regulatory adherence. As healthcare services digitize globally, ID verification tools support operational efficiency and trust in remote healthcare delivery, driving their adoption in hospitals, clinics, and online health platforms.

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ID VERIFICATION MARKET SHARE

Global key players of Identity (ID) Verification include Jumio, Thales, Okta, Socure, Trulioo, etc. The top 5 players take up above 34% of the global market.

North America is the largest market, with a share about 42%, followed by Europe, with a share of 37%.  Europe leads the market with strict GDPR and PSD2 guidelines necessitating verification tools.

North America  follows closely  due to high digital adoption and regulatory mandates in financial services and healthcare. 

Asia-Pacific is emerging rapidly, fueled by fintech expansion, mobile internet penetration, and regulatory modernization.

In terms of type, software is the largest segment, occupying 54 percent, and in terms of application, Retail and Ecommerce has a share of 29%.

Key Companies:

• Jumio
• ID.me
• Veriff
• Trulioo
• SumSub
• AU10TIX
• Persona
• Lightico
• Ondato
• APLYiD
• Smile Identity
• Shufti Pro
• IDnow GmbH
• Thales
• GBG
• IDEMIA
• Okta
• Parallel Markets
• Signicat
• Entrust (Onfido)
• Socure (Berbix)

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