What are eIDs, how did they get here, and what do they do?

By Jarek Sygitowicz, Founder and Chief Strategy Officer at Authologic

The electronic ID shift is coming, and it’s going to change how regulated businesses that adhere to Know Your Customer (KYC) and Anti-Money Laundering (AML) processes manage everything. Electronic IDs (eIDs for short) are still in their infancy as an identity verification method, especially compared to older methods like liveness checks. No one doubts that eIDs have a plethora of use cases. Every day, people actively witness the use cases attached to eIDs’ non-digital counterparts such as ID cards, passports, and so on. This makes it easy to convince end users that eIDs will help them do the same things online that traditional IDs do in real life.

But eIDs are more than just traditional IDs in pixel form. In the near future, businesses will come to rely on them to streamline onboarding, enable cross-border compliance, and, rather crucially, mitigate AI-enabled fraud. Identity fraud, enabled by AI deepfakes and synthetic identities is a hot topic for good reason. Deloitte predicts that fraud losses enabled by generative AI could reach $40 billion in the U.S. alone by 2027, dwarfing the $12.3 billion lost in 2023.

Behind these statistics are the cyber criminals who create AI-generated deepfakes and fraudulent identities by the millions, many of which trick KYC measures currently in place. eIDs, by contrast, are far more difficult to fabricate. In the digital world, identity verification is not just the process of proving you are who you say you are, but proving that you’re human (and not a bot). And eIDs do both.

In addition, eIDs present serious advantages. Like traditional IDs, they are government-issued and approved, but eIDs only disclose the necessary information when used as part of an online verification process. They are both safer and more privacy-friendly. They circumvent the need for customers to submit a video of their face from different angles (which can lead to invasive biometric data mining) or keep a picture of a plastic ID uploaded to the cloud, an easy target for identity theft. Identification data is stored locally to prevent data breaches, and they can’t be lost the way you can misplace a plastic ID. They can ensure future cross-border compatibility, and already do within the EU. It’s not just a digital alternative, it’s a solution in its own right.

eIDs here, there, everywhere?

The EU’s eIDAS 2.0 legislation is making it impossible for businesses to ignore eIDs any longer. It requires regulated businesses with operations in the EU to accept eIDs as valid

forms of verification, backed up by an implementation deadline set for 2026. In the meantime, eID checks will run alongside existing KYC processes, perhaps even serendipitously spreading end user awareness of eIDs’ convenience and utility.

In spite of regulatory requirements, the landscape for eID adoption remains uneven, with different countries being in different stages of rollout. This in turn presents significant challenges for businesses, particularly those with cross-border operations. To adopt eIDs is to add yet another layer of complexity to an already fragmented KYC infrastructure. Businesses have to manage multiple verification providers, with each bringing their own contracts, technical requirements, and more. However, there are already success stories for eID rollout and adoption, and providers who can help businesses transition to a combination of traditional KYC verification and eID verification processes. Different forms of eID can even be accepted by single interfaces.

Poland: an eID poster child?

What does the eID shift look like in action? If we wanted to take a look into the future, my home country of Poland might serve as a good case study. There, a nationwide embrace of eIDs has proven hugely beneficial for the country’s rapidly growing digital services market. The Polish government put a comprehensive issuance policy in place even before the EU made digital issuance among member states mandatory, and citizen adoption has been swift.

Polish businesses are already benefitting from their government’s forward-thinking approach to eIDs, just as they did when the e-Signature became acceptable. Businesses enabled for eIDs are seeing faster onboarding, better fraud prevention and increased customer trust and loyalty, particularly in sectors like banking, financial services and mobility. Early eID adoption is also giving them a competitive edge, both with customers and across EU markets as cross-border compatibility expands.

The results have been positive. Fears of government overreach and privacy breaches have failed to materialise. Poland stands to serve as a blueprint for other countries in overcoming the challenges and reaping the benefits of eIDs, particularly as the sense of urgency grows stronger and more global. With AI fraud becoming more sophisticated, eID-based verification is undeniably the best solution for KYC/AML-reliant businesses. Without eIDs, customer verification will become increasingly tenuous and fraud more rampant. In short, the businesses and organisations that prepare for this shift will be securing their futures and meeting the digital and economic moment.

About Authologic

Authologic is the easiest way for businesses to verify identities using government-issued digital IDs and identity wallets, alongside existing KYC methods. Its secure, unified e-ID verification platform connects multiple systems through a single integration.

As traditional verification methods like plastic IDs and photo uploads become more vulnerable to AI fraud, including deepfakes, Authologic’s platform minimizes these risks, enhances privacy, and builds trust while streamlining onboarding, and lowering operational costs for customers.

Authologic exists to bridge the gap between legacy systems and the future of identity verification. With regulations like eIDAS 2.0 mandating acceptance of e-IDs, Authologic is simplifying compliance by supporting both digital and traditional verification methods. It streamlines KYC and AML processes for sectors such as financial services, gaming, and crypto.

Founded in 2020 by banking and payment veterans Jarek Sygitowicz, Krysztof Klimczak and Marek Rogozinski, Authologic is used over 150,000 times per day. Backed by OpenOcean, Y Combinator, and Peak Capital, the company is headquartered in London, with offices in Warsaw and San Francisco.