Jul 9, 2013 · 3 minutes

Last November, on Veterans Day, Blake Hall’s startup TroopSwap, which started life as a deals site for members of the military, launched TroopID, a tool that lets US military service members and veterans authenticate their identities online in order to claim ecommerce discounts and other benefits – one of the first such tools to do so. Aside from seeing a business opportunity in helping to assure retailers that the people they are selling to are entitled to military discounts, Hall, a former US Army Captain and Iraq War veteran who's also a graduate of Harvard Business School, wanted to honor his fellow servicemen.

The Washington DC-based startup has been chugging along nicely ever since, signing up partners such as Under Armour, Sams Club, Regal Entertainment, and the WWE, among others. Through a July 4 promotion, TroopID signed up 15,000 new users over the course of 48 hours. The company is on track to hit 200,000 users by the month’s end.

Through the early days of TroopID, however, Hall and his team noticed that retailers were interested in adding more categories to the verification tool’s capabilities, specifically for first responders and students. Hall realized that his company, which now employs 21 people and is backed by $2.1 million in funding, had already built the tech capable of such an undertaking – it just needed to get its hands on high-quality data to enable the verifying. Now, drawing on a combination of public and private data, as well as physical credentials, it has achieved that.

Yesterday, the company unveiled its new identity verification network, ID.me, which serves as an extension of TroopID. It now offers a verification widget not only for service members, but also for first responders – firemen and policemen – and students. The process is simple. Users create an ID.me account, verify their various credentials, and then use that account to get benefits online. Hall says the company has made a point of giving users full control over their information, so no-one can access it without their explicit permission. That can mean that retailers just get a yes/no verification of an ID, so extraneous information, such as birthdays, addresses, or whatever else might be printed on an ID card, need not be shared.

ID.me also has a mobile app that can scan an ID card’s information and automatically populate a user’s details, such as name, age, and social security number.

Initially, Hall says ID.me will target retailers, but next year it will move into providing ID verification for higher-risk transactions, such as remote access of medical records, which ultimately could be where a bigger opportunity lies. Its first customer to use the platform for purposes beyond TroopID is Under Armour, which has extended its use of the software to include first responders. ID.me charges businesses per API call depending on sales volume, and for bigger companies it charges a licensing fee.

ID.me’s main competitor is SheerID, which offers a white label solution for businesses wanting to verify identifications for military personnel, teachers, and nonprofits, among others. Hall, however, believes ID.me’s approach is fundamentally different because it focuses on individuals and gives them a verified identity that works across its network.

To an extent, ID.me also has to compete with verification tools across individual sectors, such as among financial institutions, and automobile dealers. However, that is a very fragmented ecosystem, and, because they are competing with each other, there is no incentive for each company to provide a universal sign-on for users. Hall sees that gap as an opportunity for ID.me.

In the meantime, ID.me will face a user acquisition challenge. TroopID has been seeing encouraging growth, adding about 800 users a day since the start of the year. But it’s one thing to gain traction among a defined military set. Cracking a wider market of students and first responders – with more to come – will present all new challenges in scaling the logistical side of managing all that data, and in providing the requisite customer support for both businesses and consumers. At its current runrate, Hall expects ID.me to hit close to 500,000 users by the end of the year.

The Holy Grail for ID.me is an online verification tool centered around the smartphone that ultimately replaces physical ID cards. That’s a long way off, but Hall does harbor ambitions of becoming the universal ID verification tool for the Web. “Ultimately we’d love to be part of that kind of reality,” he says. “If we’ve gotten to that stage, it means individuals have trusted us enough as an intemediary.”