How do 3rd party ID verification websites work?

Please remove if this isn't the right subreddit for this question, didn't see anything against the rules.

I was wondering how data works for situations where a service/marketplace requires you to upload your ID/photo through a 3rd party verification site before being verified on their own site. What's the process behind this? Does the 3rd party verify and then just send an OK to the main service/marketplace? Is the data held with the 3rd party of the main service/marketplace? If …

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