The case for reusable digital IDs

What

Unum ID is a San Francisco-based ID-verification solution. Founded in 2020, Unum ID has raised $4.9M in venture funding, including a $2M Seed round in April 2022 led by Outliers Fund and 1414 Ventures.

Unum ID differentiates itself from other ID-verification solutions by making identities reusable across companies. “Whereas there are probably two dozen companies that are quite well established that do doc scanning or database checks, there are really none that are well established doing reusable—or some people call it portable—identity,” said Aidan McCarty, Unum ID’s Founder & CEO.

Why 

According to McCarty, reusable IDs help businesses experience higher throughput rates, lower fraud, and lower customer acquisition costs. Given the rise of synthetic identity fraud, Unum ID thinks more stringent verification techniques and shared data across companies can create the bind that proves a user to be the person they claim to be. Fraudulent actors can then be kicked out across companies (or reinstated if the activity was accidentally labeled as fraud), rather than forcing ID-verification companies to remain in a technological and operational arms race with bad actors.

“I think it's the only long term viable solution to preventing fraud at a large scale,” McCarty said.

How

Unum ID has built itself into ID-verification flows—with users putting in their phone number and email, and Unum ID then detecting whether a user has already verified their ID with them previously—rather than as a one-click checkout-type solution. The company avoids a button-driven solution because ID-verification companies don’t have brand visibility, since most users encounter KYC flows at most twice in a year.

Through its reusable-identity product flows, users who have previously been verified by Unum ID can use that information as a foundation for their next verification process. As a product growth strategy, Unum ID has launched a promotion called “one click or free.” It’s subsidizing KYC processes for users who don’t have data come up when companies do an API call.

“The user goes through your onboarding flow and we'll pay for your KYC process,” McCarty said. “That's a way for us to build the base of users, which makes our CAC $2 for that user, which is pretty great. And for the fintech, if you’re onboarding 100,000 users, you can save $200,000 and can put that towards more growth.”

Unum ID anticipates greater need for reusable IDs as AI-driven synthetic fraud increases. “We’re already seeing a massive rise in synthetic identity fraud in no small part because of these new AI algorithms,” McCarty said. “Once you establish true human identity that's portable, and once you do it really strongly, then you can take it around.”