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E-identity is made too complex, payments can lead forward

E-identity and electronic payments are two sided markets. Meaning: they serve two distinct groups of customers. Payments are about payers and payees and e-identity is about respectively users and relying parties. So let’s keep on thinking about these two distinct customers groups of e-identity when we talk about e-identity.

Let’s first put in some imagination. “If electronic payments were organized as e-identity nowadays …”

1. You would have a different card with different pin codes for every shop. And you can only buy the card at that particular shop
2. You would have certain cards for certain groups of shops
3. You would have a card for paying the government, a card for paying businesses and a card for paying fellow citizens. All with different currencies on them.
4. Out of privacy concerns you would be prompted for the registration of your transaction on your statement
5. Civil rights activists would be lobbying intensively on the threat of payments to a free society, because privacy is in danger
6. You could not use your card abroad, you must first buy a range of cards in the country you are visiting
7. Every shopping community would say their needs are different from the ones abroad

It is clear that from a user perspective this would not make sense, let alone from cost of security perspective.

For payments nowadays we have issuing, authentication, trust frameworks, security policies, technology standardization and business models. And authentication (essential ingredient of e-identity) comes bundled with payment services. Otherwise the payment would not be meaningful and safe. Aren’t these the things we talk about within the e-identity industry?

Then why are we still doing such a poor job with e-identity? Why is this the domain of technologists, three letter acronyms, civil rights activists, e-government evangelists and IT departments? Do we keep on allowing that every relying party keeps fixing his own solution because of the lack of compelling propositions for him and his customer? Where are the users and relying parties in this game?

All of this leading to a scattered European e-identity market place for users and relying parties and FUD (‘fear’, ‘uncertainty’ and ‘doubt’) for decision and policy makers We must be able to do a better job!

Let’s look at what all the different ‘practice islands’ (government, business, citizens, federations, user controlled etc) have in common, not to what makes them different. Let’s take a step back and engineer this e-identity stuff properly, learning the other closely related and mature industry.

Take customer requirements of the two distinct groups into consideration. Do not hesitate to interpret, reformulate and align, while designing proper business models for all parties involved. We will be surprised when we discover the simple solution. And we will be amazed by the economic impact when usable, affordable and pervasive e-identity solutions hit the market. This will be bigger than payments.



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Douwe Lycklama

Douwe Lycklama

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30 Nov 2005



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EBAday is the annual event for European payments professionals organised by Finextra and the Euro Banking Association. This community has been created to deliver a forum for EBA delegates to exchange views on instant payments, open banking and new developments in payments processing and technology.

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