The Future of Reusable ID in the UK
by Clive Bourke, President, EMEA & APAC
May 2, 2024
Since their introduction in the 1990s, the use of digital wallets has skyrocketed, fueled in part by their use for contactless payments during the pandemic. A study from UK-based Juniper Research found that the global use of digital wallets will grow from 3.4 billion in 2022 to 5.2 billion in 2026 – an increase of more than 53%.
Consumers have chosen to use digital wallets for payments because they offer a good customer experience (reducing the time and effort to purchase something) and are highly secure. The most popular example of a digital wallet in use today is the “tap to pay” feature available in many major retailers, through most cardholders, and on nearly every smartphone, allowing consumers to simply tap their phone against a terminal to make an in-person purchase.
In its article, “How digital wallets are revolutionising UK transactions,” Fintech Global wrote, “The UK is on the brink of a transformative period in the payment sector, heralded by the burgeoning adoption of digital wallets.” Worldpay’s 2024 Global Payments Report predicts payment-card-backed digital wallet transactions will account for £2.03 billion of UK ecommerce transactions by 2027 and that digital wallet transactions at point-of-sale terminals will reach 29% in the same timeframe.
Investopedia defines a digital wallet as “an application on an electronic device that stores payment information and allows you to securely make purchases without carrying cash or cards.” Instead of organizations constantly asking users to prove their identity for every service they wish to use or authenticate every time they wish to access an account, identity wallets contain all components of a user’s PII (personally identifiable information) and allow them to authenticate themselves across service providers, saving users time, providing greater security for all parties involved, and cutting costs for businesses when it comes to being able to phase out clunky, outdated identity security infrastructure.
Moving from purchases to identification
In addition to simplifying purchases, digital wallets make many transactions more convenient; through their ability to hold a variety of other electronic documents, such as membership and loyalty program cards, coupons, gift cards, boarding passes, transit cards, and event tickets, digital wallets are a passwordless, paperless alternative that are less hackable, stealable, and easier to carry around – just reach for the phone already in your pocket or bag.
The next evolution is to enable digital wallets to contain reusable ID that allows consumers and citizens to identify themselves without physical documents. This promises to simplify any situation where a person needs to identify themselves, such as flying, traveling between countries, receiving government benefits, proving they are over 18 for age-restricted applications or services, and opening and using accounts with businesses.
The UK government launched its digital identity and attributes trust framework (DIATF) in 2021. Unlike governments who are working to create national digital identity cards, the UK is setting up a governance structure underpinned by legislation to maintain trust in digital identity products and services supplied by the private sector.
In its 2023 guidance document, “Enabling the use of digital identities in the UK,” the Department for Science, Innovation, and Technology (DSIT) wrote, “This is not a step towards ID cards. Instead, we’re setting robust standards to make sure innovative private-sector solutions protect privacy, boost security, and enable greater accessibility, all while growing the economy by saving people and businesses time and money.”
These private-sector solutions are built on the concept of reusable ID, in which a person can prove their identity both online and in the physical world with a single set of verifiable credentials on their phone or other device.
Digital wallets are one format for reusable IDs. Verifiable credentials are another. UK-based cheqd defines a verifiable credential as “a tamper-evident data file with a set of claims about a person, organization, or thing that can be cryptographically verified.”
In its “Verifiable Credentials Data Model v2.0” candidate recommendation draft published in April, the World Wide Web Consortium (W3C) said, “…once the authenticity and currency of a verifiable credential…are established, a verifier validates the included claims using their own business rules before relying on them. Such reliance only occurs after evaluating the issuer, the proof, the subject, and the claims, against one or more verifier policies.”
But what a reusable ID is and how it works are only one side of the equation. For these solutions to be successful, they must be widely adopted – and that means meeting user expectations.
In February, DSIT released a findings report from dialogues it held with the public about digital identity. Among its conclusions:
- “…participants expect trusted digital identity service providers to think beyond getting the technology right, to the needs of those who use digital identity services.”
- “For participants trust is not about services being 100% robust or ‘guaranteed’ trustworthy, but about being 100% transparent in everything all those involved in identity services do.”
- “Participants do not see convenience on its own as a compelling enough reason for increased use of digital identities. They want to know how digital identity services are going to benefit society by making proving identity more inclusive.”
The opportunities & the benefits
Reusable ID represents an opportunity for businesses to use third-party identity services providers to increase trust with their customers. As more of their customers demand the ease, accessibility, and transparency of digital IDs, instead of investing their own time and money in creating an identity solution, they can enable customers to verify their identity through reusable ID solutions from the providers they use every day.
There are some important things to consider when selecting third-party provider solutions to verify and authenticate customers.
Ease
Not having to carry physical documents immediately makes travel, transactions, and other activities easier. The challenge is choosing a third-party provider who goes beyond that first step. How easy is it for customers to prove their identity when they enroll for the digital wallet or verifiable credential? If they ever need to provide something beyond the digital ID to access an account, how much friction does that cause?
Accessibility
Depending on the requirements for establishing identity, reusable ID can solve inclusion issues for people who may not have a standard, government-issued ID, like a passport or a driver’s license. When reusable ID becomes a broadly accepted standard, the user’s verifiable credential will be accepted in markets and areas of society where they can’t currently participate. In looking at solutions providers, it’s essential to consider how they reduce identity barriers without sacrificing security and just how much flexibility they provide for differently abled people to use their reusable ID.
Transparency
People want to control and access their data, particularly something as personal and critical as their identity information. They also want their data to be safe. It’s essential that the provider is clear about how the data people provide are intended to be used, how users can control that use, and how the user’s information will be secured. As the DSIT findings noted, “Being accountable, honest and transparent throughout the digital identity services ecosystem is vital for building and retaining trust.”
Despite the fact that the DIATF continues to evolve through beta testing and working with groups across civil society, industry, standards bodies, and academia, third-party identification services have begun to develop reusable ID solutions based on its guidelines. According to ThinkDigital, organizations that adhere to the DIATF standards and agree to oversight from the Office for Digital Identities and Attributes (OfDIA) will receive a trust mark, so that businesses and individuals can be confident that their digital identity solution is safe and secure.
Daon believes that biometrics has a key role to play as digital identity verification solutions for reusable IDs are developed and become widely used across the UK.
The role of biometrics in reusable ID
Modern digital identification requires modern proof of identity. Reusable ID provides the perfect opportunity to retire passwords and replace them with biometrics. Passwords are not only are hard to use, but with their ability to be lost, shared, and stolen, they create huge security gaps.
With a biometric identity verification system, a variety of unique physical characteristics are used to provide proof of identity. These include face scans, fingerprints, voice prints, and behavioral biometrics, which recognizes the patterns in how a person does tasks such as typing, moving a mouse, or swiping between screens. Because it requires both the stored template and the live factor to be present, biometric identity verification (IDV) is inherently more secure than passwords, OTPs (one-time passwords), device keys, or other traditional forms of security.
Here’s how Daon’s IDV solution works:
- The customer is asked to consent to have their biometric information captured for verification.
- The IDV app guides the customer in capturing a front-side identity document image, which is instantly analyzed to make sure it’s real, valid, and unaltered.
- Depending on the customer’s location, the document back image may also be captured and checked for fraud and against the data from the front.
- The app guides in the capture of a selfie that is checked for liveness via liveness detection and matched to the image from the identity document.
A biometric template is created with just enough information to identify the person when the live factor is presented in the future. This enables fast and easy secondary identification if it’s ever needed to accompany the reusable ID.
Biometrics can also provide more flexible ways for people to use their digital ID. People can be recognized by taking a selfie, putting their finger on a key, typing and moving their mouse, or simply talking. This opens the door for people with a wider range of abilities to access benefits more easily, take advantage of online communities, and play a larger role in the marketplace.
Click here to learn more about Daon xProof and the role of biometrics in modern identity solutions.