Using fake ID cards to label someone with a derogatory term falls under cyber harassment or defamation in many countries. In the United States, depending on the state, creating a fake ID (even a digital one) to impersonate or humiliate another person can lead to:

We are moving away from physical wallets. Students today want their ID cards on their phones. To create a digital pass (like for Apple Wallet or Google Pay), the source image often needs to be a clean PNG to ensure the layout looks professional and not like a crooked scan.