Should Your Business Accept Digital IDs?

Imagine this scenario. Your bartender asks for identification to verify a customer’s age and is presented with a Digital ID. They aren’t sure if they should accept it because they have not been trained to verify whether the Digital ID is authentic or counterfeit.

Is accepting the Digital ID against company policy? Will they get in trouble if they accept it? What happens if they unknowingly sell alcohol to a minor?

In the end, the bartender turns the customer away out of fear. The business loses a sale, the bartender loses potential tips, and the customer leaves frustrated and posts a negative review online.

This becomes a lose-lose-lose situation.

To prevent situations like this, business owners must understand their state’s laws regarding Digital IDs and how they should be handled at the point of sale.

In this blog post, we’ll explain what Digital IDs are, which states currently offer Digital ID programs, where Digital IDs are accepted, and whether your business should accept them.

What is a Digital ID?

First, a bit of context. The U.S. Department of Homeland Security sponsors the initiative known as Next Generation Identity: Mobile Driver’s License, which aims to modernize identification across the United States.

This Mobile Driver’s License (mDL) effort began in 2020 after the passing of the REAL ID Modernization Act. Since then, several states have adopted programs allowing residents to use digital versions of their state-issued identification.

According to the Transportation Security Administration (TSA):

“A digital ID is an electronic representation of personally identifying information that may be used to verify the identity of a person. A mobile driver's license is a type of digital ID.”

A Mobile ID typically refers to a digital version of a state-issued driver’s license stored on a smartphone. A Digital ID could include a Mobile ID or another identity verification method tied to government-issued identification.

For the purposes of this article, we will refer to a Digital ID as a digital version of a state-issued ID or driver’s license used to verify a customer’s age.

Which States Currently Offer Digital IDs?

Digital ID programs are still relatively new, and many states have not yet adopted them. Some states remain hesitant due to privacy concerns and the risks associated with managing sensitive personal data.

However, several states have already implemented Digital ID programs.

States With Active Digital ID Programs

• California (pilot program through June 2026)
• Georgia
• Colorado
• Arizona
• Iowa
• Maryland
• Utah
• Florida
• Mississippi
• Louisiana (limited use cases)

States Currently Developing Digital ID Programs

• Kentucky
• New York
• Washington, D.C.

Additional states are expected to introduce Digital ID programs in the coming years, although the rollout process is complex and often involves legislative debate.

How to Get a Digital ID

Obtaining a Digital ID typically begins with acquiring a traditional physical ID through your state’s licensing authority.

Once you have a physical ID, you can create a Digital ID using your smartphone through one of two primary methods.

1. State-Sponsored Mobile Applications

Some states offer official mobile applications that allow residents to securely store and display a Digital ID.

For example, states like Colorado and Utah provide dedicated mobile apps designed specifically for Digital ID verification.

Residents can download these apps and enroll their IDs by following instructions provided on their state government websites.

2. Smartphone Wallet Integration

Another common method is through smartphone wallet applications.

Some states allow residents to store Digital IDs in popular digital wallets, including:

• Apple Wallet (Maryland, Georgia, Colorado, Arizona)
• Google Wallet (Maryland, Georgia, Colorado, Arizona)
• Samsung Wallet (Arizona currently)

These wallets allow users to securely store their identification and present it digitally when required.

Where Are Digital IDs Accepted?

The question of where Digital IDs are accepted does not have a simple answer. Acceptance varies by state and by organization.

Airport Security

The Transportation Security Administration (TSA) currently accepts Digital IDs at select airport security checkpoints.

However, acceptance is limited to specific airports and devices, so travelers should check TSA guidance before relying on a Digital ID.

Law Enforcement

Most law enforcement agencies still require individuals to carry a physical driver’s license or ID card.

While some officers may accept Digital IDs, official guidance from most agencies states that Digital IDs should be considered a companion to the physical ID rather than a replacement.

Businesses Selling Age-Restricted Products

Businesses that sell alcohol, tobacco, or other age-restricted products generally have the right to refuse service if a customer only presents a Digital ID.

This is often due to limited employee training and the relatively new nature of Digital ID technology.

Additionally, some Digital IDs require specialized verification systems. For example, businesses in Florida must use a dedicated “Verifier” application to authenticate Florida Digital IDs.

In most cases today, Digital IDs are only accepted within the state that issued them.

For example, a Georgia Digital ID is typically only accepted by businesses located in Georgia.

Should Your Business Accept Digital IDs?

Now for the most important question: should your business accept Digital IDs?

The answer depends largely on your state’s program and your business policies.

Some Digital ID systems are designed to be easily verified by businesses, while others require additional applications or equipment.

Because the technology is still evolving, many businesses are still determining the best way to handle Digital IDs.

Recommended Best Practices

• Understand whether your state offers a Digital ID program.
• Decide whether your business will accept Digital IDs.
• Determine whether out-of-state Digital IDs will be accepted.
• Train employees on how to properly verify Digital IDs if they are accepted.
• Stay updated on evolving laws and technology related to Digital ID programs.
• Conduct regular compliance checks to ensure staff members are verifying identification correctly.

Preventing Compliance Risks

Regular compliance checks can help ensure employees consistently verify both physical and Digital IDs when required.

Companies like Stinger Compliance conduct private Stings to evaluate whether employees are properly checking identification and following company policies.

These anonymous compliance checks help business owners identify potential risks before they result in legal consequences.

Final Thoughts

Digital identification technology continues to evolve, and businesses must stay informed to ensure they remain compliant with state laws.

Clear policies and proper employee training will help prevent confusion at the point of sale and protect your business from unnecessary risk.

If you’d like to learn more about how private compliance checks can help protect your business, visit the Stinger Compliance website to create an account and schedule your first Sting.