By Klaus Schmeh, cryptovision GmbH.
As long as the consumer has no real concept of the worth of his or her private data, there is no willingness to pay for its protection. For operators of national ID schemes, it bears the question whether there is a solution to both, adding value to an identity scheme and sharing the investment. On the one hand, this means that an ID operator needs to provide attractive applications to the card holder, like an electronic payment functionality, access to e-government services, or secure online voting.
On the other hand, consumers need to understand that secure identification with an eID card has a tangible value that is far superior to free social media logins. In the end, eID scheme operators can profit, as well as card holders and application providers – a win-win-win situation.
Wanted: Digital identities
In terms of promoting the role of personal identity data, there is a lot happening right now: the latest European Data Protection and ePrivacy regulations, eIDAS as well as international Know your Costumer (KYC) regulations in the payment sector are so stringent, that both consumers and businesses are finally forced to recognize the importance and commercial value of personal data.
This presents a real opportunity to the providers of eID schemes, to not only safeguard its citizens’ data, but to add real value by adding applications, such as voter registration, driving licences and vehicle registration, health insurance, social security and payment functionalities.
Leveraging the electronic features of an eID card can enable unique economic models. What makes the eID card so desirable for third parties? Banks and insurances, for example, can add KYC and fraud reduction apps. Payment providers can use the standardized card format to add credit card and other payment applications. Health organizations have different pain points that can be solved, such as the authorization of access to personal health data. Online services can use eID tokens as a means to strongly authenticate users and verify their identity.
Adding applications often means inviting other service providers to join the scheme. Technically, this has been deployed by cryptovision successfully in various ways, without compromising security: modern eID tokens contain chip systems so sophisticated that multiple applications can be added without risking security implications or data crossover.
eID and KYC
Know your customer (KYC) policies are becoming increasingly important to prevent identity theft, financial fraud, money laundering and terrorist financing. At the same time, at the core of customer conversion is a fast, seamless and secure onboarding process. Identifying customers and verifying their identity has become a pain point for financial institutions, insurers and other regulated companies.
Cryptovision’s eID solutions solve this problem and create revenue flow by enabling third parties, such as banks, to securely purchase authorization certificates in order to get secured access to the ID data stored on the eID card, to run their KYC use cases.
Case Study Ghana
Ghana’s new multi-functional eID (Ghana Card) can be used as a reliable verification step in a KYC process. The cardholder’s identity data, which as securely verified when applying for the card and includes attributes, such as name, address and biometrics, can be retrieved to pre-fill applications online and off line when opening, for example, a bank account.
Being able to use the eID card will provide a secure platform to speed up account opening, onboarding for new products and services and reduce processing cost for banks and financial service providers.
eID and Payment
As a different refinancing concept, an eID authority can pool resources with credit card companies and other payment suppliers, by a payment function in the ID card. Combining an eID card with a payment card provides interesting applications, like granting discounts based on information stored on the card. This model is promising because it presents a win-win scenario: adding relevant applications to the card increases its value to the user. It is also more convenient to only have to go through the verification process once, as payment and government application share similar strict guidelines. Cryptovision offers the only common criteria evaluated multi- application platform in co-existence with an EMV certified banking platform.
Case Study Nigeria
The eID card forms a key component of the Nigerian Identity Management System, deployed by NIMC as part of its mandate to create, maintain and operate the country’s first central National Identity Database and provide proof of identity to Nigerians 16 years and older.
In the first phase, the Nigerian eID is used for three applications: as a proof of identity, for digital payment (based on the EMV standard), and for digital signature with biometrics. The Nigerian eID is the first national project in the world that combines eID functionality with a payment system, providing millions of Nigerians – the majority of whom have never had access to a banking product – with the security, convenience and reliability of electronic payments.
Joining forces – and sharing cost
The value of peoples’ identities needs protecting and joining forces can be a very smart way to do so. In the best case, it adds both, functionality to the system and much needed funding to the operator. The citizen profits from this especially if it makes the ID card less expensive to purchase.