Fintech Payments

Why can’t digital identity be easy, like payments?

Why can’t digital identity be easy, like payments? Image: MediaStore,
Written by Dave Birch

The most significant digital identity initiative over the past five years has been the GOV.UK Verify programme. Story by Dave Birch.

I have often seen payments (especially card networks) used as an analogy for digital identity. In fact, I brought up the analogy myself at the fun OIX meeting in Amsterdam last Thursday. Certainly when you look at something like GOV.UK Verify, there are some striking comparisons:

  • A central scheme with a brand, rule book, governance body and switching infrastructure (i.e. Verify itself).
  • Issuers (i.e. the private sector identity providers).
  • Merchant acquirers (well merchants anyway, in the form of government relying parties).

We have to keep reminding ourselves that these card networks didn’t appear overnight. What we have today is a result of 60 or more years of evolution. Admittedly, the pace of change has increased significantly, but we need to recognise that it often takes time to build scale and gain adoption. There are special cases, of course. PayPal, for example, grew out of a significant pain point within eBay, which gave it immediate scale.

There is, however, one key difference between payments and identity: you cannot sell stuff online without a means to receive payment, and normally this means integrating with a payments scheme that works for your customers. You can, however, sell stuff without leveraging an external identity scheme – you just give the user an ID and password specific to the service. This is, however, bad news for users, resulting in the fragmented personal data and password mess we find ourselves in today.

There needs to be an incentive for merchants to do something different to this. Perhaps merchants need a big stick? Like GDPR for example. Merchants are going to have to be a lot more careful with personally identifiable information in the future. One thing they could do is use an identity provider to hold that data, and in the process reduce their risk.

Individuals also need to realise that their personal data is valuable, just like their money. This is going to require some education, because so far they’ve been taught to share data without considering the consequences.

In the UK, arguably the most significant digital identity initiative over the past five years has been the GOV.UK Verify programme. They are at the stage where they need to grow. The scheme is up and running, so they’re now busily signing up citizens and services. It’s a critical point in its development. We are very pleased that David Rennie, who leads industry engagement on the programme, will be taking time out of his busy schedule to join us at Tomorrow’s Transactions. Come along and find out how it’s going.

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– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Image: MediaStore,

About the author

Dave Birch

David GW Birch is an author, adviser and commentator on digital financial services. He is Global Ambassador for Consult Hyperion (the secure electronic transactions consultancy that he helped to found), Technology Fellow at the Centre for the Study of Financial Innovation (the London-based think tank) and a Visiting Professor at the University of Surrey Business School. He is an internationally recognised thought leader in digital identity and digital money, and was named one of the global top 15 favourite sources of business information by Wired magazine.

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