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Understanding Microsoft Entra Verified ID for real-world identity engineering

Arun Kumar
Entra Verified ID

Picture a familiar Windows/AD problem, just wearing 2026 clothes.

You hire a contractor in a different country. They need access to a handful of internal apps, maybe a helpdesk portal, maybe a privileged request workflow. You don’t want to create a full AD account yet. You don’t want a permanent Entra B2B guest either. HR wants “proof of employment” and “proof of training completion.” Security wants phishing-resistant assurance, but also wants to minimize what data is shared. Operations wants a flow that can be audited, revoked, and automated.

If you squint, this is the same story we’ve lived for decades with smart cards, AD CS, federation, and “show me your badge.” The twist is that the “badge” is now a cryptographically signed credential stored in the user’s wallet, presented with explicit user consent, and verified through open standards and DNS-based trust instead of your domain boundary.

That is the niche Microsoft Entra Verified ID is trying to occupy.

Simply,

Microsoft Entra Verified ID is Microsoft’s managed verifiable credentials platform that lets an organization issue cryptographically signed digital credentials to users’ wallets and verify those credentials later, using decentralized identifiers (DIDs), open credential standards, and domain-based trust binding.

That definition is accurate, but it hides the part that matters to Windows/AD teams:

Verified ID is not “another way to sign in.” It’s a way to carry an attestation (“this person is an employee”, “this caller passed Face Check”, “this device is managed”, “this contractor has safety training”) across trust boundaries, without giving the verifier online access to your directory or requiring the subject to have an account in the verifier’s tenant.

Why this matters now for Windows, AD, and identity security

Verified ID is timely because it addresses three pressures that are colliding in enterprise identity:

  1. Trust boundaries keep dissolving. AD forests and Entra tenants are no longer the “container” for every identity relationship. Partners, contractors, gig workers, and customers create constant cross-boundary authentication needs.
  2. Helpdesk and onboarding fraud is a top-tier attack path. Attackers don’t always break Kerberos; they convince humans to reset MFA, enroll devices, or add guests. Microsoft is explicitly positioning Verified ID (including Face Check) for high-assurance identity verification workflows like helpdesk caller validation.
  3. Zero Trust pushes you toward “prove a property, not a person.” Many access decisions don’t require the verifier to learn a full identity profile. They need a smaller property: employment status, region eligibility, training completion, age bracket, entitlement level.

Classic federation (AD FS / SAML / OIDC) tends to over-share by default because it’s optimized for login claims. Verifiable credentials are optimized for portable proofs.

If you already work in hybrid identity, it helps to mentally place Verified ID alongside familiar building blocks:

For Entra fundamentals and tenant-side identity management context, this internal primer is a useful refresher. Manage identities in MS Entra ID

What practitioners think Verified ID is—and what that misses

Most architects describe Verified ID as “digital credentials in Authenticator” or “decentralized identity.” That’s directionally correct, but incomplete.

A better practical description is:

What the “digital badge” framing misses is the core engineering value:

Verified ID separates identity proof from online directory reachability

With SAML/OIDC, the verifier essentially says: “I’ll trust your identity provider, but I need it online during the transaction.”

With verifiable credentials, the verifier says: “I trust that your organization signed this credential, and I can validate it without calling your directory.”

That’s a major shift in trust shape. It’s closer to how we’ve always treated signed documents, certificates, or smart cards—except optimized for web and mobile UX.

First principles and design assumptions that drive real behavior

If you want to predict how Verified ID behaves in production, you need its foundational assumptions:

1) Credentials are tamper-evident objects, not sessions

A verifiable credential is designed to be stored and replayed (within validity constraints), not minted per-login like an access token. The W3C Verifiable Credentials model is explicitly issuer–holder–verifier, with cryptographic integrity and ecosystem-level privacy considerations.

Operational implication: you must think about issuance lifecycle, revocation, and expiry as first-class controls, not afterthoughts.

2) The trust anchor is the issuer’s DID + domain binding, not your tenant boundary

Entra Verified ID uses did:web as its trust system and removed did:ion selection in late 2023.

did:web is intentionally “boring”: you prove control by serving DID configuration over HTTPS on a domain you control. The trust link is enforced using the Well-Known DID Configuration mechanism – W3C CCG.

Operational implication: DNS + HTTPS posture becomes part of identity assurance. Misconfigured TLS, redirects, or brittle domain hosting can show up as “risky” wallet warnings or failed verification.

3) The wallet is part of your security boundary

In Microsoft’s flow, Microsoft Authenticator (or a wallet built using Microsoft’s wallet libraries) mediates user consent, stores the credential, and signs presentation responses.

Operational implication: device compromise, device loss, and wallet backup/recovery become identity topics—not just endpoint topics.

4) Microsoft does not store your credential contents

This is a subtle but crucial point: the issuance plan docs and revocation guidance emphasize that Verified ID doesn’t store VC data values.

Operational implication: your verifier cannot “query Microsoft for what claims exist.” Your app must get the needed claims through presentation, and your revocation strategy must be designed up front.

5) The platform is standards-aligned, but still has Microsoft-shaped ergonomics

Verified ID supports a set of open standards including W3C VC data model, OpenID for Verifiable Credentials (OID4VC), Presentation Exchange, and common JOSE/JWS mechanisms.

Operational implication: interoperability is realistic, but you still need to validate what’s supported by the specific wallet(s) you rely on, and how Microsoft’s Request Service API maps to those standards.

Core components: the irreducible building blocks

When you strip away branding, portals, and samples, Entra Verified ID reduces to these components:

Now let’s go deep, because the details here are where most deployments succeed or stall.

The deep dive that actually makes this deployable

This section is intentionally implementation-first. It’s the part you should be able to use to build a production pilot that won’t embarrass you in a security review.

Step 0: choose a use case that matches the technology’s strengths

Verified ID shines when you need one or more of these properties:

Good first pilots:

Bad first pilots:

Step 1: pick your onboarding mode (Quick setup vs Advanced)

Microsoft supports:

Use Quick setup when:

Use Advanced setup when:

One operational detail that surprises people: Advanced setup currently requires Key Vault Access Policy permission model (not Azure RBAC) due to a documented limitation.

Step 2: treat domain binding like PKI hygiene, not a “portal checkbox”

With did:web, your DID is tied to your domain and HTTPS posture. Microsoft’s setup guidance explicitly warns:

If you skip domain verification during development, Microsoft’s own tutorial shows you’ll get a risky/unsafe warning in the wallet UX.

Production-grade rule of thumb:

Step 3: decide your credential type, claims, and revocation strategy up front

This is where a lot of teams fail later.

Key facts:

This forces an architectural choice:

Option A: short-lived credentials (operationally simple)

Option B: long-lived credentials (better UX, more lifecycle complexity)

Many Windows/AD teams naturally prefer “cert-like” long-lived credentials. That can work, but only if you also bring “CRL discipline” into the design.

Step 4: wire up the Request Service API correctly

From an app perspective, the center of gravity is the Request Service REST API.

Two endpoints are the practical starting point:

To call the API, your app needs:

A minimal mental model for the request payloads:

Important callback constraints:

In practice, many pilots use ngrok for development. Microsoft’s tutorial explicitly uses ngrok and points to a FAQ if you can’t use it. Production should use a real internet-facing endpoint with strict ingress controls (more on hardening below).

Step 5: implement issuer + verifier flows with a repeatable validation plan

A robust pilot should include both:

Microsoft provides sample apps and a structured tutorial that includes:

A pragmatic approach (even if you won’t use the sample code long-term):

  1. Run the sample end-to-end once.
  2. Confirm your DNS/domain binding removes the “risky site” wallet warning.
  3. Reimplement the flow in your real app using the same API calls.

Step 6: harden it from “works” to “production-grade”

This is the part most blog posts skip.

Network hardening for callbacks

Your callback endpoint becomes a high-value target because it receives verification outcomes. Harden it as if it were an authentication endpoint:

Microsoft explicitly calls out network hardening for Request Service API callbacks in its evolving guidance.

Key management and crypto posture

Verified ID supports multiple signature algorithms and has introduced NIST P-256 support (relevant for regulated environments).
It also provides instructions for upgrading signing keys to become FIPS compliant.

If your security team cares about FIPS/NIST alignment, treat this as a first-class checklist item—not a late-stage scramble.

Logging reality check

Verified ID audit logging currently focuses on management changes via the Admin API, not every issuance/presentation event.

So you must instrument your own issuer/verifier apps for:

This is similar to how AD FS apps must log the authorization decision even if the federation service logs token issuance.

Performance and scaling intuition

Issuance involves Key Vault signing operations. Microsoft’s issuance planning doc notes multiple Key Vault signing operations per issuance transaction and recommends understanding these dependencies.

That matters at scale:

Failure modes and rollback strategies you should plan for

Here are the big ones, and how to survive them:

Rollback strategy (keep it boring):

A practical reference architecture (Windows/AD-friendly)

Here’s a deployment pattern that tends to pass security reviews because it mirrors established identity boundaries:

            +------------------------------+
            |   Entra tenant (Issuer)      |
            |  - Verified ID configured    |
            |  - did:web:did.company.com   |
            |  - Key Vault keys            |
            +---------------+--------------+
                            |
   HR / AD / Entra claims   |  Issuance Request (API)
                            v
                 +----------+----------+
                 | Issuer Web App      |
                 | - AuthN user        |
                 | - createIssuanceReq |
                 | - callback endpoint |
                 +----------+----------+
                            |
                            | QR / deep link
                            v
                 +----------+----------+
                 | Wallet (Authenticator|
                 | or custom wallet lib)|
                 +----------+----------+
                            |
                            | Presentation
                            v
                 +----------+----------+
                 | Verifier Web App    |
                 | - createPresentReq  |
                 | - business decision |
                 | - logs + risk gates |
                 +----------+----------+
                            |
                            v
                 +---------------------+
                 | App / Helpdesk / PAM|
                 +---------------------+

If you’re used to AD FS: think of Issuer Web App + Verified ID service as the token service for credentials, and the Wallet as the user-mediated “token holder” that can present proofs to verifiers without calling your directory each time.

Further drill-down:

Below are the kinds of questions that reveal whether someone understands Verified ID as an engineering system, not a marketing concept.

1) If Microsoft doesn’t store credential values, what exactly can the verifier rely on?

The verifier relies on cryptographic proofs: the credential is signed by the issuer’s keys, and verification checks validate integrity, issuer identity (DID), and trust binding (domain linkage). Your app then decides based on the claims presented.

2) What breaks if your did:web domain gets misconfigured or expires?

Trust breaks. Wallets may show warnings – “risky site” patterns in Microsoft’s own tutorial), and verifiers may reject requests because domain binding can’t be validated. Treat the did:web domain like a PKI root endpoint.

3) Why is Key Vault in the architecture at all?

Because signing keys must be protected and usable for signing operations. Verified ID stores keys in Azure Key Vault in advanced setups and uses them to sign credentials and related messages.

4) What’s the practical limit on “how big” a credential request can be?

Microsoft documents size limits for issuance requests, photo claims, callback messages, and DID documents; these constraints force you to keep payloads lean.

5) How do you revoke a credential if Microsoft doesn’t store it?

You must design the credential to index one claim (salted + hashed) so it can be searched and revoked later. Without an indexed claim, you can’t revoke.

6) What’s the failure mode if your callback endpoint is not reachable?

The Request Service API can throw callback URL unreadable errors or your flow stalls because lifecycle events can’t be delivered. Microsoft explicitly requires the callback URI to be reachable.

7) Why is “callback hardening” a security topic?

Because the callback carries verification outcomes. If an attacker can spoof or replay callback events, they can trick your app into granting access. You must validate correlation state, authorize callbacks, and apply network controls.

8) How is this different from just using Entra ID Conditional Access + MFA?

Conditional Access governs sign-in to your apps inside the Entra authentication plane. Verified ID governs presentation of a portable proof, often for scenarios where sign-in alone doesn’t prove the property you care about – employment verification, helpdesk caller assurance, partner portals, entitlement proofs.

9) What happens if the user loses their phone?

This becomes a wallet recovery problem. Microsoft’s FAQ discusses recovery approaches and trade-offs: There isn’t a single magic answer; you design recovery like you design credential recovery.

10) Is Verified ID “self-sovereign identity”?

It’s better described as “decentralized credential exchange using standards.” The issuer still controls issuance policies and trust decisions, but the holder controls presentation and sharing. That maps to the DID/VC model rather than pure “no central services” ideology.

11) What’s the trust anchor for did:web, and how is it verified?

The trust anchor is control over the web origin (domain + HTTPS). The well-known DID configuration spec defines how to prove the DID–domain relationship.

12) How do you avoid turning credentials into long-lived bearer tokens?

Use short expiry where possible, require Face Check or step-up where needed, and design revocation. Avoid embedding overly powerful entitlements into long-lived credentials unless you can revoke quickly.

13) Does Verified ID support open standards like OpenID4VC and Presentation Exchange?

Microsoft’s supported standards documentation lists OpenID for Verifiable Credentials and Presentation Exchange among supported specs.

14) What’s your “upper bound” for how many relying parties can use one verifier DID?

Microsoft’s planning guidance indicates a tenant has a verifier DID, and multiple relying parties can share it. Practically, the bound becomes operational: logging separation, policy separation, and how you partition apps and callback endpoints.

15) Why might you not want Verified ID for an internal-only app?

If the app already lives fully inside your Entra trust boundary and needs real-time directory authorization, classic sign-in tokens + Conditional Access + device compliance may be simpler and more auditable. Use Verified ID when portability or higher-assurance verification is the actual need.

Inherent tendencies and systemic risks

Verified ID has strong value, but it also has built-in tendencies you should plan around.

1) DNS/HTTPS becomes a security dependency

In AD, DNS is already critical, but this is different: did:web makes your public domain hosting part of the trust fabric. Outages or misconfigurations become identity-impacting.

Mitigation:

2) You can accidentally create “shadow authorization”

If you embed “role” or “entitlement” claims in a credential and treat it as authoritative for months, you may bypass your normal access governance (PIM, access reviews, group-based controls).

Mitigation:

3) Logging and incident response shift to your apps

Because issuance/presentation events are not guaranteed to be fully captured in Entra audit logs (management changes are logged; issuance/presentation aren’t fully reported), your incident response depends on your app telemetry.

Mitigation:

4) Wallet security becomes part of IAM

Device loss, malware, and backup/recovery choices directly affect identity assurance. Microsoft explicitly treats wallet apps as the holder component.

Mitigation:

Common misunderstandings and sharp corrections

Misunderstanding: “Verified ID replaces Entra ID sign-in”

Appeal: one tool to rule them all.

Reality: Verified ID augments identity scenarios; it does not replace core authentication flows. Microsoft’s architecture docs frame it as augmenting scenarios like onboarding and proof-based access across trust boundaries.

Rule of thumb: Use Verified ID when you need a portable attestation. Use Entra sign-in when you need an authenticated session.

Misunderstanding: “If I issued it once, it’s always true”

Appeal: feels like a badge.

Reality: employment status changes, contracts end, privileges change. Revocation and expiry are how you keep truth aligned.

Rule of thumb: If the claim can change, it must expire fast or be revocable.

Misunderstanding: “Revocation is automatic”

Reality: you must index a claim; otherwise you can’t revoke.

Rule of thumb: No indexed claim, no revocation. Decide indexing before you ship.

Misunderstanding: “Callbacks are just plumbing”

Reality: callbacks are security-critical and have strict constraints (reachable endpoint, supported headers).

Rule of thumb: Treat callback endpoints like auth endpoints: authenticate, validate, rate-limit.

Expert essentials checklist (pasteable)

Where Verified ID fits in your architecture, and where it doesn’t

High-value applications (especially for Windows/AD-heavy orgs)

  1. Helpdesk identity verification before sensitive actions
    Combine a presented “Verified Employee” credential with Face Check for higher assurance. Microsoft explicitly documents helpdesk verification use cases.
  2. Partner access without tenant sprawl
    Instead of creating accounts everywhere, require a credential presentation before granting limited access. This can complement Entra external identities patterns.
  3. Onboarding workflows
    Issue a credential after HR validation, then use it as a prerequisite for downstream access package or device enrollment flows. Microsoft notes Entitlement Management integration scenarios.
  4. Verified employment assertions for external ecosystems
    Microsoft has published guidance around “place of work verification” (e.g., LinkedIn).

Anti-patterns

Practical alternatives and complements

Verified ID is not the only “passwordless / strong auth” control in the Microsoft ecosystem. For classic sign-in hardening, Windows Hello for Business remains a key approach (key-based auth replacing passwords) – MS Hello

For hybrid identity hygiene, ensure your Entra Connect/Cloud Sync practices are solid—especially if credential issuance is based on directory claims that originate in AD DS. Filtering and synchronization decisions can become security decisions – azure AD connect advanced filtering for synchronization

Forward look: what changes over the next 3–7 years

A few trends are likely:

How to hedge today:

Key takeaways and what to do next

Entra Verified ID is easiest to understand when you stop thinking “login” and start thinking “portable, signed attestations.”

It can materially reduce onboarding friction and helpdesk fraud when implemented with strong lifecycle controls. It can also create shadow authorization if you treat credentials like permanent access grants.

If you want to build momentum from here:

For related deep dives on windows-active-directory.com that pair well with this topic:

And if your day-to-day reality is “operate AD + Entra cleanly at scale,” ManageEngine’s resources can complement Verified ID work:

 

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