The ongoing and complicated work to build better digital identification systems for commerce and payments involves a host of players. The government is among those whose expertise and data can add fuel to digital ID innovation efforts — and such involvement will likely to have increase over time, according to a new PYMNTS interview.
Neil Butters, head of digital identity, innovation and new ventures at Canada-based Interac, talked about how in addition to payment services firms, governments could also hope to play a larger role in digital ID. The interview comes at a time of significantly increased focus on digital ID and a deeper appreciation for its role in the next wave of online commerce and payments — one that promises in the 2020s to be even more global, more focused on marketplaces of all types, and more robust when it comes to seamless, secure consumer experiences.
Digital ID Catalyst
As for Interac, the organization looks at itself as “being a central mediator, or a catalyst, in providing digital ID solutions in Canada,” Butters said — a role that could give Interac a significant presence in digital ID efforts to come. Interac’s role has recently evolved, as have the needs and demands of consumers, merchants, financial institutions and other players.
News came in early 2018 that the Canadian payments company had reorganized, creating a single company from two separate enterprises: Interac Association, which had jurisdiction over debits, and Acxsys, with ties to tech-focused payment offerings, such as push payments and real-time transactions.
Indeed, when it comes to ongoing work to boost digital ID, the potential for those newer types of payments can stand as a good and positive result, Butters told PYMNTS. Businesses still rely heavily on analog processes tied to checks when it comes to B2B transactions. But adding a secure, seamless and otherwise efficient digital ID process to the B2B transaction space could further encourage the adoption of speedier movement of funds, and enable “businesses to transmit money in higher volumes,” he said. Better digital ID can “make things easier.”
To get to a better point of digital ID, the data being used for verification and authentication must be broad and reliable. And that’s where governments come in, given the ID databases they maintain. It sure beats social media, for instance, according to Butters.
“Social media profiles are generally self-created,” he said, meaning the data is not anchored to legally binding (and usually more accurate) forms of identification data. “To solve this problem,” Butters said, “government needs to get involved” with the creation and promotion of “digital variants” of such ID documents as drivers’ licenses and passports — a global effort that is gaining steam, but that depends on specific jurisdictions. Such forms of ID, in turn, can be used by — and better relied upon — “by banks, telcos, what have you,” he added.
An Inclusive Solution
No matter what, “there needs to be an inclusive solution that has the same level of security across” those different levels of government, Butters said — whether, in the case of Interac, that means the federal government or the provincial governments. That doesn’t mean private industry won’t face any heavy lifting themselves when it comes to digital ID, of course — only that governments still have to offer more help.
Another main goal of bringing about better digital ID? Getting rid of passwords, which offer very weak defenses against fraud and data breaches. “The days of the passwords are gone,” Butters told PYMNTS. Some readers might find that optimistic, but it would be hard to find anyone in the digital commerce and payments game who favors passwords. No matter the timetable for the demise of the password, you can be sure that better digital ID — and all the efforts and players who support it — are indeed working toward that future.