Mobile payments and the identity revolution
At the heart of mobile payments is identity. In a cash based society, identity isn’t a very big concern as everyone’s cash is the same. But if you are going to be swiping, scanning, or merely waving to the Starbucks barrista as she matches your picture to your face, your identity is the critical enabler to making the whole scheme work.
So it might be a good idea to look at the concept of identity a little more closely. Identity always arises as a part of a structure meant to allow the identifier some kind of rights and privileges while protecting the interests of the identifying party. The result of this need is some kind of identification, which could be a credit card, passport or driver’s license, or a myriad of similar things. The identification needs to follow a set of pre-defined standards so that the identifying party can trust it. No one wants your handmade passport. It is identity and its structures that allow us to travel the world, purchase things on the web or make a withdrawal.
Identification as a concept is as least as old as the Bible, which details papers given to travelers by a king asking authorities in a distant land to give them safe passage. That eventually morphed into a real passport by the English sometime around the 12th century. The 20th century brought the real explosion in identification types as communication advances allowed for the creation of real-time authentication of identity for systems from credit card transactions to passwords and user IDs, and a host of other kinds of ID.
Which leads us to where we are today. In my wallet, I have far more kinds of ID than I would like to carry: a driver’s license, several credit cards, loyalty cards, group IDs. And that’s just the physical IDs I manage. Online I have many more IDs, each requiring its own user ID and password. It’s probably safe to assume that most Americans actively manage well over 50 – and perhaps as many as 100 – ID’s on a regular basis. This isn’t easy, and certainly presents a clear opportunity for improvement. Can technology help us really simplify our lives in this regard? Or will it just create new and different headaches?
The answer lies in the approach of Starbucks I mentioned earlier. That solution is supplied by Square and it allows a registered user’s face to appear on a display with the user's name and payment credentials. Nothing else is required.
If you think about identity, it starts at your birth and with your family. When you are born you are tagged almost immediately with a wristband. Why? Simple, even your mother wouldn’t be able to identify you when you are born. This issue goes away as your mother bonds with you and your family gradually gets to know you. This is done through repetition; your face, your voice, even your smell become your signature to those who know you. Nothing more is necessary.
From your family, identification extends to your neighborhood, your school and your place of employment. In each case, the system, or the people within it, learn who you are. They are the representatives of a smart identification solution. This solution doesn’t rely on a token to represent you; it is smart enough to really recognize you with no token (e.g. passport, driver's license, credit card) necessary. This is exactly what Square has created: a solution smart enough to know who you are which allows you to authenticate yourself without the need to have anything with you other than your face.
But where does this technology go next? My guess is to your handset. You may have heard the speculation that Apple’s next iPhone will allow you access the home screen with your fingerprint. This seems like a small thing, but it’s a game changer. Once your handset can act as the identifier it can be applied to many situations as a form of authentication. For example, in banking it would be comforting to both the bank and the account holder to know that something more than a user name and password was required before a major transaction occurred. And it won’t just be high value transactions which will be affected. Once the technology of facial recognition, voice recognition, and fingerprint recognition are ubiquitous, it would be foolish not to use it for transactions of all types provided the experience is efficient, reliable and speedy. Thus identification as a concept may begin to shift dramatically and quickly as smart identity solutions lower costs of deploying identity solutions and minimize risk due to fraud.
So we are on a journey back to where we started, before identity got clumsy and inefficient, where the system knows who you are, and you never have to manage identity in any other way than being you. Sounds like something to look forward to don’t you think?
Greg Coogan Greg Coogan is the Field Marketing Lead for Morpho Cards USA, and premier provider of secure identity solutions. He has been working on mobile payments since 2005. www