FEBRUARY 2020 THE SECURE TECHNOLOGY ALLIANCE PUSHES FOR DIGITAL DRIVER'S LICENSES Page 6 (Feature Story) Americans are more optimistic about biometrics than Europeans 09 Page 9 (News and Trends) Fake social media profiles are wreaking havoc when left unchecked 14 Page 14 (Deep Dive) © 2020 PYMNTS.com All Rights Reserved WHAT'S INSIDE A look at various governments’ initiatives to 03 launch digital identity programs, as well as the obstacles certain countries — including the United States — face when rolling them out FEATURE STORY An interview with Randy Vanderhoof, executive 06 director of the Secure Technology Alliance, on the advantages of digital driver’s licenses and why a federal-level body may be necessary for nationwide acceptance NEWS AND TRENDS METHODOLOGY The latest headlines from the digital ID space, Who’s on top and how they got there, including 09 including digital identity authentication 16 three sets of top provider rankings milestones in Australia as well as SmartMetric’s and Neustar’s new solutions DEEP DIVE SCORECARD An in-depth examination of the fake profiles The results are in – see the highest-ranked 14 that account for 25 percent of all social media 17 companies in a provider directory featuring logins, and the billions of dollars in damage more than 200 major digital identity players they can do if left unchecked ABOUT 90 Information about PYMNTS.com and Jumio 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 following findings, methodology and data analysis. WHAT'S INSIDE The spread of biometric verification solutions, such as Around the digital ID world fingerprint and facial recognition technologies, is help- Credit card owners have glowing impressions of bio- ing to boost digital identity adoption around the globe. metrics, with a recent Visa study finding that two-thirds Approximately 96 million facial recognition-equipped of surveyed cardholders preferred biometric authen- mobile devices were in circulation as of 2019 — a num- tication to passwords when conducting banking ber that is expected to skyrocket to 800 million by 2024. transactions. It also found that more than half of re- Fingerprint-scanning smartphones will likely eclipse spondents would switch banks if they were not offered this number, reaching 4.6 billion mobile phones during such functionalities. Respondents had various reasons the same period. for their approval, with 42 percent enjoying not having Most digital identity measures are associated with cor- to remember passwords and 34 percent feeling that porations, but some countries are also leveraging such biometric tools offered improved security over pass- solutions. Australia has been making headlines for sev- words. The 2019 Verizon Data Breach Investigations eral months thanks to its ongoing digital ID initiatives, Report backs up these findings, stating that 80 per- while Argentina, Morocco and Ukraine are partnering cent of data breaches can be traced to compromised or with third parties to launch related pilot programs. weak passwords. The United States lacks a central ID-issuing body to fol- Santander México is aware of the growing demand for low suit, but many states are picking up the slack with biometric verification measures and is thus instituting their own digital driver’s license (DDL) programs. Such such options at its branch locations. The financial insti- programs are in various stages of implementation and tution (FI) has been collecting customers’ fingerprints development in 12 states, with Colorado and Louisiana’s and facial data since February 2019, and it has installed offerings considered to be the most mature. These ini- 9,900 biometric scanning stations at its branches. tiatives still face certain issues — such as not working Santander México plans to enroll 3.7 million customers across state lines — but private organizations are push- and invest approximately 1 billion pesos ($53 million ing for solutions to overcome these challenges. USD) in the program. Biometric tools and other digital identity solutions will Technology provider SmartMetric is also improving its see massive growth in the coming years, meaning gov- biometric offerings, integrating them directly into cred- ernmental bodies will need quick resolutions to these it and debit cards that will be offered at 500 banks by potential issues. The best government is an extension the end of 2020. The biometric cards will feature built-in of its residents' wills, after all, and many citizens appear fingerprint scanners that will prevent unauthorized us- on board with digital identity adoption. ers from making purchases and a miniature battery that © 2020 PYMNTS.com All Rights Reserved 3 WHAT’S INSIDE can be recharged at ATMs, contactless card readers and point-of-sale (POS) systems and runs for more than nine years. For more on these stories and other digital ID de- velopments, read the Tracker’s News and Trends section (p. 9). Why DDLs are the authentication method of the future The U.S. currently relies on state-issued driver’s licens- es to fulfill its identity verification needs, but many states, including Colorado, Louisiana and Maryland, are working to digitize these offerings for improved acces- sibility and security. There are still obstacles that must be overcome before DDLs can be accepted nationwide, however. For this month’s Feature Story (p. 6), PYMNTS spoke with Randy Vanderhoof, executive director of the Secure Technology Alliance, about the accessibility, pri- vacy and security advantages DDLs bring to the table, as well as the challenges of implementing them without a federal-level agency to ensure compatibility across state lines. Deep Dive: How fake profiles endanger social media Social media has become a cornerstone of everyday life, with Facebook, Twitter and YouTube boasting a collective 2.77 billion users. Up to 25 percent of these users are fake, however, made up of simple artificial intelligence (AI) algorithms that account for as much as 75 percent of all social media cyberattacks. This month’s Deep Dive (p. 14) explores the ways these ille- gitimate accounts can damage both websites and their users, as well as how providers can up their authentica- tion games to weed out fraudsters. © 2020 PYMNTS.com All Rights Reserved 4 WHAT’S INSIDE WHAT’S INSIDE Share of Americans excited about 48.1% using biometrics at retail stores Portion of customers who prefer biometrics to 34% passwords because of improved security Number of New South Wales, Australia, Five Fast Facts 1M citizens using DDLs Expected number of 500k companies the CCPA will affect Portion of social media accounts 25% that are fake © 2020 PYMNTS.com All Rights Reserved 5 FEATURE STORY FEATURE © 2020 PYMNTS.com All Rights Reserved 6 FEATURE STORY The Secure Technology Alliance Pushes For Digital Driver's Licenses DDLs are gaining popularity in the U.S., where 12 states Privacy, security and constant updates are working to develop and implement them. Many non- DDLs offer a range of benefits that their plastic coun- governmental groups and organizations are working to terparts do not, including improved security and user make them ubiquitous across the country, including the privacy. Vanderhoof noted that there are many miscon- Secure Technology Alliance (STA), a nonprofit indus- ceptions about what forms they could take, however. try association dedicated to developing and improving “It’s important to understand that DDLs are not meant security technologies for a variety of businesses. The to replace the physical plastic card,” he explained. “It’s alliance recently embarked on a nationwide initiative a complement to the card that can be used in situations to promote DDLs, which it believes will improve priva- that warrant more security, privacy, safety and a digital cy and security. audit trail.” “State driver’s licenses are the de facto national ID of Improved security is one of DDLs’ primary attractions. the United States, and yet they can only be effectively Traditional plastic cards are vulnerable to theft, where- used for a limited number of face-to-face applications,” as mobile phones’ security features protect DDLs. said Randy Vanderhoof, the STA’s executive director. Smartphones’ built-in fingerprint or facial recognition “People already trust state-issued identity [cards], so requirements would thwart thieves looking to gain ac- having that state-issued identity … be digital, so that it cess to digital IDs. can be used for transactions [that are not done in per- son], is a huge opportunity in the market.” “Nothing new really needs to be invented to do that, but providers like Apple, Google and Samsung are making PYMNTS recently spoke with Vanderhoof about the improvements to their operating systems specifically advantages of DDLs compared to those of traditional to support these types of mobile identity credentials,” plastic cards, as well as the challenges that make many Vanderhoof said. states reluctant to issue them. © 2020 PYMNTS.com All Rights Reserved 7 FEATURE STORY Another advantage is privacy. Clerks and workers who developing them. Convincing the other 38 states may re- check plastic IDs can see all of the details on them, in- quire overcoming some of the system’s flaws, however. cluding cardholders’ full names, addresses and even their organ donor statuses. DDLs can be designed so 50 states bring 50 different challenges they display only the information necessary, such as The single biggest challenge facing DDLs’ U.S. imple- birth dates when verifying customers looking to pur- mentation is the country’s federated nature, according chase age-restricted items. to Vanderhoof. Each of the 50 states could have a differ- ent method of issuing and authenticating DDLs, which “If [users are] in a situation where they’re looking just would be problematic for those who often travel be- for age verification, there would be an option to display tween states.