Is it Legal?:
Driver's license swiping is a relatively new phenomenon and has yet to be challenged. There is a privacy law in the U.S. called the Driver's Privacy Protection Act of 1994 (DPPA) that could possibly be used to end swiping, depending on how you interpret it.
DPPA requires that all states protect the privacy of personal information contained in an individual's motor vehicle record. Like most privacy acts, however, DPPA is extremely weakened by a number of exceptions. For instance, an individual's driver's license information may be obtained and used by legitimate government agency functions, Motor vehicle market research and surveys, licensed private investigators and businesses for legitimate needs in transactions initiated by the individual to verify the accuracy of personal information.
Businesses--like Swipe--can say that they are protected by this last clause: swiping is a legitimate business need to verify age and validate a driver's license. But the big catch: what about the future uses of these records? Are these legititmate business needs?