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Friday, December 8, 2023

Green Sheet interviews AU10TIX's Ofer Friedman

Digital identity verification (IDV) drives security and convenience for consumers and merchants, but experts have noted that IDV standards vary by region. eIDAS, for example, is widely used in Europe, W3C is popular in Australia and mDL is the go-to standard for Google and Apple apps. These incompatibilities pose a dilemma for businesses that cannot positively identify a customer, and must choose between declining a transaction and potentially losing revenue or accepting a transaction from an unverified buyer and risking potential identity fraud.

The Green Sheet discussed this issue with Ofer Friedman, chief business development officer at AU10TIX, an identity verification company. Following are interview highlights.   How will IDV standards incompatibilities challenge service providers in 2024? 

It's not just incompatibilities, but also hurdles put by governments on verifying these credentials. The results are clear: There will be difficulty in utilizing Digital IDs to verify people's identity, especially for cross-border service providers. For both local and cross-border service providers, operational issues and technical know-how on proper, frictionless implementation are challenges. The expected consequences are utilization levels below actual coverage, and abandonment of process.

How can payments industry stakeholders address these challenges?

The key stakeholders here are those who regulate and implement digital IDs. Much thought has been invested in security and process mechanics. Regulators and implementers need to address user experience, especially by less savvy consumers. Obviously, in this Tower of Babylon of standards, interoperability is key. Beyond that, the next key stakeholders are identity verification automation providers who need to create flexible enough solutions to accommodate different standards and modes of operation.   

What workarounds (if any) exist, and what is their degree of success? 

There are work-arounds in various markets, but not the ones you'd want to see. Suffice it to say that people are resourceful and come up with creative ways to submit digital IDs, but these come at the cost of security. From solution vendors' point of view, the (hopefully) temporary work-around involves resorting to hooking up with those who have managed to secure ways to verify various digital IDs. But that comes at the cost of a more cumbersome and expensive process. Everyone might benefit from better access to efficient utilization of digital IDs than what we see today.

How can platform providers get on the same page? 

Payment platform providers obviously understand that we're progressing toward a world of digital IDs embedded in devices. My advice would be to think hard on the day when digital IDs will start being compromised. ... Remember when ID chips on passports were considered as secure as Fort Knox? By now, it is well known that this is not the case. Be prepared with proper defenses for the soon-to-come day when it will be discovered that digital IDs can be cloned, implanted, hijacked, etc. You might want to consider having a vendor whose proven expertise is in deep security. end of article

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