Here's the steps:
Cut a rectangle about an inch to and inch and a half bigger on each side than an ID card (I used my old bus pass) cut a rectangle out of the middle so the inside hole is still about half and inch smaller than the card.
cut small diagonal cuts towards the outside points of the patch. press to the outside.
fold the outside edges in half an inch so they lay on top of the inside pressed edges. cut a square of clear vinyl that nearly fits inside the folded outside edge. It's important to have it go nearly to the edge because you'll want to catch those in stitching. pin.
Sew around the inside window, 1/8 inch from the edge. This will pretty much secure the vinyl to the fabric. While you're at it, sew along ONE outside edge, 1/8 inch in. If you want a top opening pocket, sew along the long edge, side/short. This is because the topstitching to sew the pocket to the bag is only going to be on three sides to leave an opening.
topstich along 3 outside edges. Start at one end of the already sewed side.
Looking back, I probably should have put a tiny bit of velcro on the open side, but the ID shouldn't fall out. I sewed it to the pocket which I then sewed onto the bag.