If the 2014 holiday season was any indication, it’s safe to say that consumers are becoming more comfortable with digital transactions. According to IBM Digital Analytics, online sales for Black Friday and the week following were the largest in history. For the first time ever, mobile sales accounted for 22% of total Cyber Monday online sales. But even as more and more transactions — from banking to government services — are moving online, authentication and protection of electronic IDs in these transactions continues to lag behind.
Today, the state-issued driver license is the document we use most often to establish our identity in order to receive a wide range of services, benefits and privileges for in-person interactions. No one does a better job vetting and authenticating identities than state Motor Vehicle Agencies. We trust that physical licenses are real, verified documents because we understand the high levels of security that these agencies follow when they issue the document.
There is no widely available digital credential for online use that we trust as much as a driver license to verify identity. While online commerce marches forward, the inability to confirm that people are who they say they are to a high degree of certainty creates significant risk and inefficiencies in the market that add costs for companies, and ultimately consumers. Challenges related to secure IDs have also impeded progress for online services like digital health or government programs.
While the need for a physical driver license will remain – at least for now – new digital identity solutions will bring the same trust as the physical credential to mobile and online transactions. Innovative digital identity solutions, such as the electronic IDs and digital driver license can provide consumers the same level of trust as traditional face-to-face interactions but with added security and convenience for both online and in-person transactions.
A digital driver license is the digital embodiment of the driver license document we currently carry and use today. The trend toward a cashless society — enabled by innovations like Google Wallet and Apple Pay — will drive progress toward the widespread use of digital driver license, which will provide added security and convenience to any in-person transaction where consumers are currently using physical driver licenses.
Electronic IDs, on the other hand, will bring the trust of the physical license to the web. There are different needs and challenges to consider when people are separated by phone lines, firewalls and all kinds of computing systems. Secure electronic IDs will address the gap that exists in the online environment today, and give people the ability to assert their identity online, eliminating the need for some in-person transactions while also increasing security and reducing the risk involved with existing online transactions. Electronic IDs put consumers in control of their identity: they’ll have the freedom to enroll in programs, and receive services and benefits built on their preferences, loyalty and individuality.
Electronic IDs in action
MorphoTrust was recently awarded a grant from National Strategy for Trusted Identities in Cyberspace for a pilot program with the North Carolina Department of Transportation that will leverage the state driver license, state ID documents and system of record to create an eID for those applying for the North Carolina Department of Health and Human Services Food and Nutrition Services Program online.
With secure electronic IDs, users can login to apply for benefits online with the same trust as if the person were appearing in person with a driver license as their method of identity verification. The pilot will test whether the use of the eID can eliminate the need for people to appear in person to apply for benefits, reducing costs to the state while providing applicants with faster, easier access to the services they need. Eventually, eIDs could be applied to enrollment in other government programs in the State of North Carolina, or even in other states.
In order to extend the trust inherent in the physical driver license to digital platforms, we need to leverage the knowledge and processes of the driver license issuers to create the backbone for online IDs. These agencies use many types of security features, such as digital watermarking, that have existed for years to secure the physical licenses we’ve come to trust. The same knowledge and processes must be applied to secure eIDs in the digital realm. eIDs use a trusted credential and/or biometric, to create and associate a digital identity with the same individual who received the physical license.
There’s no doubt that we are living in an increasingly digital world. Online transactions will account for $370 billion in sales by 2017, according to Forrester Research. Digital identity solutions like eID will complement the physical driver license, extending the trust of the credential to the online environment and providing increased convenience and security for consumers.
About the AVISIAN Publishing Expert Panel
At the close of each year, AVISIAN Publishing’s editorial team selects a group of key leaders from various sectors of the market to serve as Expert Panelists. Individuals are asked to share their unique insight into different aspects of the campus card market. During the months of December and January, these panelist’s predictions are published at SecureIDNews.