On-line identities: coming soon to distance sellers?
As published in the EMOTA white paper on online payments (recommendation #3) distance sellers seek solutions which let buyers identify themselves online, in order to reduce fraud. In this respect the needs for distance sellers are the same as for governments who also want to bring a vast variety of governmental services on-line.
The good news is that more and more initiatives are set up by governments (also driven by the EC’s Services Directive), but the bad new is that often governments are mainly focused on solving their own needs. This often leads to a government issuing its own passes, tokens and passwords, which are hardly used, since an average citizen only uses governmental service once or twice a year.
In some countries (e.g. Finland, Norway, Denmark, The Netherlands) the approach is to re-use identity tools that people already have in their pocket, such as bank passes, mobile phones, corporate tokens and other solutions.
The re-use paradigm is particularly interesting because the end-user is more likely to adopt these solutions since he or she already knows how to use it. For distance sellers (including governments!) this is interesting because one can use an already existing installed base and customer habits, avoiding the costly issuing of own identification solutions.
Re-using what people have in their pockets is already happening on a large scale: think of credit cards which were brought on-line or of on-line banking payment methods, where the security of on-line banking is re-used to initiate a payment.
Distance sellers may pay a premium for products which give payment guarantees, which is the stimulus for financial institutions and telco’s to develop such innovations. By developing e-identity into a transaction model, a new market will develop and innovation will happen.
Will we be able to organize such an e-identity market for e-commerce as well?