JULY 2019 Facebook’s Libra AND THE FUTURE OF DIGITAL IDENTITIES Page 6 (Feature Story) Apple launches its own digital ID program 9Page 9 (News and Trends) The challenges of digital IDs in the mobile space 13Page 13 (Deep Dive) © 2019 PYMNTS.com All Rights Reserved WHAT'S INSIDE Digital ID developers race to provide better, 03 more secure solutions FEATURE STORY Wayne Vaughan, co-founder of the 06 Decentralized Identity Foundation, on Facebook’s Libra cryptocurrency and how it will impact the digital identity industry NEWS AND TRENDS METHODOLOGY The latest headlines from around the digital Who’s on top and how they got there, including 09 identity space, including Apple's new digital ID 15 three sets of top provider rankings program, 3D finger vein scanners at hospitals and more DEEP DIVE SCORECARD An in-depth look at mobile digital IDs and the The results are in. See the highest-ranked 13 issues world governments have faced during 16 companies in a provider directory featuring implementation more than 200 major digital identity players. ABOUT 89 Information about PYMNTS.com and Jumio TABLE OF CONTENTS ACKNOWLEDGMENT The Digital Identity Tracker is done in collaboration with Jumio, and PYMNTS is grateful for the company’s support and insight. PYMNTS.com retains full editorial control over the presented findings, methodology and data analysis. WHAT’S INSIDE The digital identity market is expected to reach $15 billion paralysis of choice with so many options available. One by 2024, and giants such as Google and Apple are rac- potential solution is a decentralized, self-sovereign stan- ing to improve identity verification experiences. Utilizing dard that allows consumers to own their digital identities Facebook and Google to log into third-party websites and use them for anything they need. This would prevent has become ubiquitous, along with the ability to pay them from having to create multiple accounts on different for goods and services via developers’ proprietary pay- platforms or relying on a single login tool, like those pro- ment methods. vided by Apple or Google. Concerns about digital ID security continue to make head- Such a solution is a way off, but firms and governments lines, howerver. The 2017 Equifax data breach, which around the world are continuing to innovate in the space. exposed more than 148 million digital identities, serves as developers’ nightmare scenario, painting a picture of what Digital identity developments around the world could happen if they’re not thorough. Poor security could Apple announced its own digital ID program, Sign In with result in billions lost to fraud, with more to follow if con- Apple, at its recent Worldwide Developers Conference. All sumers leave their platforms over data concerns. App Store apps that offer third-party sign on systems will be required to offer Apple’s program as well. The company Many developers are leveraging biometrics to protect noted that Sign In with Apple will be available for develop- their customers, as such technologies provide safer er testing later this summer. alternatives to passwords and knowledge-based verifica- tion systems. The biometric market is projected to reach Switzerland’s Jura Hospital is currently testing a 3D fin- $59 billion by 2024, and its solutions include everything ger vein scanner to more effectively secure patient data. from facial recognition to behavioral analysis to blood The move is part of Switzerland’s E-Health initiative, which vessel scans. requires the nationwide implementation of two-factor au- thentication (2FA) in healthcare. Jura chose this system More players are involving themselves in the digital ID specifically because it is capable of recognizing blood market as it grows, but many industry experts fear a vessels through surgical gloves. © 2019 PYMNTS.com All Rights Reserved 3 WHAT’S INSIDE South Korea’s Financial Services Commission (FSC) has approved blockchain operator ICONLOOP’s my-ID sys- Executive Insight tem to protect data collected for digital identities. my-ID stores identifying information on customers’ phones, preventing them from having to create new accounts when accessing different services. ICONLOOP expects How can platforms better balance secure that my-ID data will be readily accepted by banks and authentication with usability? FinTechs without the need for further verification. For more on these stories and other digital identity developments, read the Tracker’s News and Trends sec- “There are a few key ingredients required when it comes to optimizing usability. Traditional methods of tion (p. 9). authentication have their own set of [user experience] challenges. Facebook’s Libra cryptocurrency raises concerns Passwords: The average person [has] 90 online ac- among privacy and security advocates counts [that require] passwords, and the number Facebook made waves last month when it announced keeps growing. … About a third of online purchases are abandoned at checkout because consumers cannot Libra, a cryptocurrency set to launch next year. The so- remember their passwords. cial media company also quietly revealed its intention to SMS-based two-factor authentication: Many websites explore a decentralized digital identity standard, which send security codes to your phone number to confirm has long been a dream of groups like the Decentralized your identity when signing in. But what happens if you lose your phone? You can try using recovery methods Identity Foundation (DIF). For this month’s Feature to access your accounts, but it’s generally an unpleas- Story, (p. 6) DIF’s co-founder Wayne Vaughan spoke ant experience. with PYMNTS about how Libra has disrupted the Knowledge-based authentication: [This method] is digital ID space, and his concerns over the cryptocurren- plagued with usability and security challenges, includ- cy’s security. ing users forgetting the answers to their supposedly secret questions. Deep Dive: The latest initiatives and challenges to Biometric authentication, however, holds much more expanding mobile ID promise. Thanks to [facial recognition], all you need is to create a 3D face map when the original account Digital identities are more widespread than ever, but is created. … Users can [then] unlock their accounts and [complete] high-risk transactions — including wire there are still more than a billion people around the globe transfers and password resets — with … selfies. It’s who lack identifying documentation. Smartphone-based simple, fast and dramatically more secure than tradi- mobile ID systems could close this gap by providing fast tional authentication methods.” access to vital online services to anyone who owns such a device, but the growth of mobile IDs is not without its difficulties. This month’s Deep Dive (p. 13) explores the latest public and private mobile ID programs, as well as REINHARD HOCHRIESER the teething issues they face during implementation. vice president of product management, Jumio © 2019 PYMNTS.com All Rights Reserved 4 WHAT’S INSIDE Number of people worldwide without 1b any proof of identity Number of data records exposed due to data 1.6B breaches since 2005 Projected value of the digital identity Five Fast Facts $15b market by 2024 Amount lost to new account fraud in North $3.4b America in 2018 Portion of Indian citizens over the 99% age of 18 who are enrolled in the country’s digital ID program © 2019 PYMNTS.com All Rights Reserved 5 FEATURE STORY FEATURE Facebook’s Libra AND THE FUTURE OF DIGITAL IDENTITIES © 2019 PYMNTS.com All Rights Reserved 6 FEATURE STORY Social networking giant Facebook made headlines last service or relying on a single log-in tool from a massive month when it announced Libra, a new cryptocurren- corporation like Apple or Google. cy expected to launch in 2020. Cryptocurrencies are The Decentralized Identity Foundation (DIF) has been well-trodden ideas in the FinTech world — more than 1,600 working with corporations and regulators to one day are currently in circulation — but Libra has the largest fi- reach this goal, but the foundation’s co-founder, Wayne nancial backing of any to date. Vaughan, has some concerns surrounding Libra’s impact The main buzz surrounded the cryptocurrency itself, but on the future of digital identity. a Libra-focused white paper also held a pair of sentences that painted Facebook’s intentions in a new light: “An addi- Libra’s privacy concerns tional goal of the association is to develop and promote an Facebook is no stranger to the concept of digital identi- open identity standard. We believe that decentralized and ty, and many websites that require users to log in often portable digital identity is a prerequisite to financial inclu- allow visitors to use their existing Facebook credentials sion and competition.” rather than create new accounts. With that convenience comes a trove of data that Facebook can access about its A truly decentralized digital identity standard has been a users, however. Libra will provide the social media giant white whale for tech companies for decades. Such a solu- with similar information about its users’ financial habits tion would allow consumers to own their digitial identities as spending occurs. and use them for whatever they need, rather than having to create individual accounts and passwords for every “There has to be a way to identify who is transacting within the system,” Vaughan explained. “The identity component © 2019 PYMNTS.com All Rights Reserved 7 FEATURE STORY of this is probably not being driven by nefarious motives. “But, if you have a hundred partners, those hundred part- It's being driven by the need for having regulatory compli- ners are responsible for securing themselves — and that’s ance in multiple jurisdictions, not an identity that is tied to a hundred points of failure.” any one particular government.” Facebook has few options available when it comes to en- Concerns would be exacerbated if Libra ran on a public suring all its partners are on the same security page.