Back In The Day, if somewhere like a car hire agency wanted to record proof of identity they'd photocopy your driver's license on paper, and store it in a filing cabinet. The computer record of a customer's account would just say "driving license checked, on file at branch #1234"

Security-wise this comes with obvious downsides - but as protection against cyberattack, it's pretty much the gold standard.

A system abandoned decades ago? https://en.wikipedia.org/wiki/Gold_standard

Unfortunately letting random companies photocopy your passport leads to identify fraud.