ID Verification Startup Seeks to Secure Every Internet Transaction

As the sharing economy, on-demand service networks, and digital banking and financial services sectors breed, the volume and value of all online transactions and corresponding fraud has also increased.

The San Francisco-based Persona, an identity verification startup on a mission to secure every internet transaction, is aiming to expand its efforts in helping businesses securely and seamlessly identify individuals. Co-founded by former Square engineer Rick Song and former Dropbox engineer Charles Yeh, Persona just announced its Series A funding round — with $17.5 million raised from investment firms such as Coatue and First Round Capital.

Persona takes a user-centric approach to identity security by acting as the internet’s identity verification layer. The company said its configurable platform plugs into a client’s codebase and offers identity verification across every possible use case.

“Credit unions are no strangers to the importance of identity verification. From both a compliance (know your customer/anti-money laundering) and fraud deterrence perspective the need for identity verification is clear,” Song, CEO/co-founder of Persona, said. “But when it comes to implementing a streamlined software solution, credit unions and banks often find themselves stuck figuring out what solutions actually meet their unique needs and are robust and secure enough for them to use.”

Song added with all transactions going online, internet identity requires more than a one-size-fits-all approach, especially with deep fakes and synthetic identity fraud on the rise. “Persona’s customizable, secure and easy to use approach is also the first identity platform that prioritizes our customers, treating people like people, not user IDs.”

Persona believes every company that touches personal user data needs to protect its customers, without creating too much friction. The firm observed historically that identity verification and a good user experience have not gone hand-in-hand.

Persona said it utilizes all best practices: Database lookups, quizzes, reverse phone lookups, document verification, government ID verification, and biometric options such as selfie uploads and live video capture to produce a facial similarity score. Persona uses artificial intelligence and facial recognition to mitigate deep fakes and synthetic identity fraud, as parts of a holistic and complete identity verification stack.

Persona explained its core metric for success is solving every possible use case and pain point for identity verification, whether it is ecommerce and fintech, telemedicine subscriptions, tech-enabled real estate viewings, gig economy logins, guest check-ins for offices, etc.

Song also pointed out when it comes to identity verification solutions, credit unions find the market littered with single point solutions that solve only small parts of the identity puzzle. “One vendor may provide access to databases. Another might specialize in ID verifications that validate government issued IDs. No vendor is looking at identity from a holistic view and that is why Persona is building the identity infrastructure layer of the internet to tie online transactions to physical identities.”

Persona cited two use cases where identity verification can make a difference.

First, often financial institutions fail to offer remote account creation because of an ineffective system architecture, inefficient integration and poor user experience. “Persona allows credit unions to mix and match verifications and compliance checks on a single platform.” Song said credit unions can configure a process that best meets their needs by combining items such as a fully automated government ID verification, live selfie video capture to check for liveness and ID comparison, identity database referencing, phone two-factor authentication (2FA) for ownership verification and database crosschecking, watchlists and sanctions screening, and fraud/threat signaling based off IP address, geolocation and network analysis.

A second use case centers on account takeover protection and securing high risk transactions. For example, when an individual tries to reset a password or change sensitive account details or if suspicious behavior is detected (large withdrawals, multiple login attempts), credit unions often follow the same protocol. Depending on the risk level a simple 2FA phone verification is initiated, the customer calls a support agent who pulls up a credit report and verifies information such as address, mother’s maiden name and Social Security number.

Song noted there are many flaws with the current manual approach: The end to end verification process can take up to 10 to 30 minutes; support agents are not always available 24/7; and with all of the recent data breaches, knowledge-based authentication is no longer a robust verification method by itself.

Persona allows companies to tailor multiple verification workflows to meet the needs of any use case. “By having a single integrated platform re-verification of an individual can be enhanced by knowing more prior verification attempts,” it said. For instance, it is unlikely that a fraudster will be able to replicate all of the signals that make an individual unique, such as access to a government ID, live selfie verification and phone access. “By re-verifying individuals through one simple platform, credit unions can be sure that the online individual is indeed who they claim to be,” Song said.