What Does Identity Verification (IDV) Mean?

IDV is an acronym for identity verification. You might have encountered this term when setting up an account with an online wallet, neobank or cryptocurrency exchange. Businesses implement IDV to ensure that the customer’s real identity matches who they claim to be. 

What does IDV mean?

IDV is an acronym that stands for identity verification. The main purpose of IDV is to ensure that a user of an online service is actually who they say they are. Businesses in many industries require IDV, but it’s especially common when it comes to payments, trading and investing.

Most often, you’ll be required to undergo identity verification when you’re setting up an account. Sometimes, you might be asked to provide additional verification after you’ve already been using the service. 

A common way in which a user’s identity is authenticated in an IDV process is by cross-referencing official document provided by the user with other sources of data. For example, the user might be required to record a video of themselves following specific instructions, such as moving their head in certain directions. 

The reason why many online businesses have an identity verification requirements is to combat money laundering, terrorist financing, and various forms of fraud such as identity theft. In many jurisdictions, businesses that conduct financial transactions are not allowed to operate unless they have adequate identity verification checks in place.

For example, practically all cryptocurrency exchanges operating in the United States, Europe and other major markets are required to conduct identity verification to ensure that their customers are who they say they are.

How does the identity verification (IDV) process work?

When completing an identity verification process, the user is typically required to provide a government-issued document (either a photo or a scan). A government-issued photo ID, passport or driver’s license are usually all accepted. 

The user might also be required to take a selfie or record themselves following instructions provided by the identity verification software. These methods are a form of biometric verification, and the data collected from them is compared to the photo on the document provided by the user. 

After you pass the identity verification process, you might also be asked to provide additional information. The more thorough verification process is known as know your customer (KYC) and you’re most likely to encounter it if you’re setting up an account on a platform related to finance, investing or payments.

Are IDV and KYC the same?

Identity verification (IDV) and know your customer (KYC) are related, but not the same. The KYC process as a whole is more thorough, and might also require users to provide data such as proof of residency, information related to their finances, and more. 

Meanwhile, IDV or identity verification typically refers to the processes used to verify that the customer is actually who they claim to be and not someone else. IDV tends to be less thorough than KYC. 

Alternate meaning of the IDV acronym

In the context of car insurance, IDV stands for insured declared value. It refers to the maximum sum that the insurer offers in case the car is stolen or damaged beyond repair. In the simplest terms, a car’s IDV is calculated by taking the car’s market price and deducting the car’s depreciation value from it.

The IDV is important when it comes to the premium – the higher your car’s insured declared value, the higher premium you’ll have to pay in order to get it insured. 

The bottom line

The acronym “IDV” can have multiple meanings. The most common meaning according to our research is identity verification, which refers to the various processes employed by online platforms to ensure that their customers are actually who they claim to be. 

In the card insurance industry, “IDV” is also used as an acronym for insured declared value.