Mastercard and Orange: why global brands are delving into African biometrics
The speed at which African nations are implementing biometric systems for national ID and electoral rolls has created something of a goldrush for the biometrics industry, as the recent ID4Africa 2019 conference in Johannesburg highlighted.
Other players not necessarily associated with ID and biometrics have taken notice and are joining the field. Mastercard was even a major sponsor of ID4Africa, promoting its efforts in identity inclusion. Another global brand, French telecom Orange, which also has mobile payments as a key part of its business, was present to showcase how governments can utilize their agents as a ready-made network of biometrics capturers. Biometric Update spoke to both companies at the event about their different approaches.
“If you think about if from our perspective, the more people who are integrated into the global digital economy, the better for our bottom line,” Antonia Stroeh, Senior Vice President of Government and Development at Mastercard told Biometric Update. The payments giant is taking a long-term approach to African markets where many outside the formal financial sector are far from being able to apply for a Mastercard.
“A mainstream bank wouldn’t find it very economically attractive to serve them,” said Stroeh, referring to those living on the poverty line, “However, they are being served, for example by their government. Maybe they’re part of a pension program… maybe they’re getting benefits from an NGO, maybe they’re being served by an employer trying to figure out if they’re a legitimate person.” Mastercard is rolling out a series of different biometric identity and payment systems to solve these issues for the unbanked and build its markets in Africa.
“What we’ve done is created a system which lets us repeatedly identify an individual without storing biometric data or channeling biometric data through a network,” said Stroeh. An individual has his or her biometrics captured (face, fingerprints, palm etc), which are hashed. This one-way hash is stored on the card, not the cardholder’s personal biometric information. “We’re using biometrics to create an individual identifier – and it has nothing to do with your national identity which is a government verified document – we can link to databases like that, but Mastercard chooses not to own databases like that,” added Stroeh. The NFC smartcard simply lets other service providers verify that the cardholder is the same person, rather than checking his or her identity, creating a parallel identity system for the services involved.
The holder would choose how and when to allow access to the data. Agencies may find benefits in being able to recognize when they are both dealing with the same individuals, said Stroeh, such as the Ministry of Agriculture seeing that a fertilizer subsidy scheme correlated with improved health indicators from the receivers, all the while not knowing the identities of those individuals.
Use cases include health – partnering with the vaccination alliance Gavi for digital record-keeping for vaccinations; in education where Kupaa creates a digital administration for a school tracking attendance and collecting fees and in aid situations where an aid organization can know to whom it has distributed cash without having to own and manage a secure database of the recipients.
A general payments card is on trial in Mozambique with the inclusive finance provider Letshego. It allows a biometric smartcard to be loaded with up to $75 as a way to allow secure payments without the KYC burden of registering for a full bank account.
Of course, there are fees involved. “We will charge the service provider which we are being a vendor to. So if we equip clinics with Android phones and smartcards, there’s a cost to that,” said Stroeh, “We do want to break even so we can reasonably reinvest in the long term, so we make certain charges, but the end consumer fee is up to the bank and the regulator.”
Orange is taking a very different approach. The telecom operator which has a presence in almost 20 African countries is making tools available to connect with existing government digital ID systems.
With its mobile networks and Orange Money mobile payments system for person-to-person transfers as well as in-store and online purchases, Orange already has an extensive web of agents. People take cash to booths and offices to load their phones with credit and pay into or withdraw from the Orange Money accounts linked to their phone numbers. Orange is now hoping to piggyback off this network to offer governments a range of connected services such as biometric capture.
“We are much more integrated,” Frederic Reboulleau, Marketing Enabler Director, told Biometric Update, “and the ID is for far more than just Orange services.”
For example, a customer wants to open an Orange Money account. The agent’s device can scan the national ID card. But what if the person doesn’t have an ID card or has lost it? The agent can use the device to take the person’s biometrics such as a photo, fingerprints and e-signature and send them for KYC at Orange and also send data to the identity specialist working with the government such as IDEMIA to compare the details with ID and biometric databases. The customer can then replace a lost ID card, open an Orange Money account or even apply for an ID card, depending on the set-up, returning to the agent to collect the card produced by the government and dispatched to the Orange office.
“It’s a win-win situation as it does the KYC and also promotes financial inclusion,” said Reboulleau, “We want to develop a platform for e-government, including services such as pre form-filling.” Orange is making the tools available to developers. The firm has previously worked as an ICT provider on other biometric data acquisition projects such as passports in France.
Unlike Mastercard’s parallel ID system, Orange is aligning itself to integrate with and provide government services to existing national ID systems. It is already facilitating property tax collection in Cameroon, pre-school fees in Ivory Coast and setting up further education-related systems for student management and fees, but linked to real identities.
Inclusion became a more prominent theme of ID4Africa 2019, from the opening remarks of host country South Africa’s Minister for International Relations and Cooperation, Naledi Pandor, who addressed gender and refugee inclusion, through to the closing debate touching on building trust around schemes to broaden inclusion.
As being registered for a formal identity is often the key requirement to accessing government services, and as systems across Africa are constantly updated, adding digital operability and often biometric verification to ID requirements, undocumented people are increasingly left out. Orange has identified a way to interact with national programs to increase their reach and accessibility, while Mastercard offers alternatives at varying scales to allow those with or without full ID to access schemes and services, and also to be included anonymously. Ultimately it is individual nation states which decide the requirements both for getting an ID and how necessary that ID is, and also the KYC requirements for electronic payments, but ID4Africa participants such as Orange and Mastercard, the thematic sponsor for inclusion, show that the technology is there and evolving rapidly.
Africa | banking | biometric payments | biometrics | Cameroon | Côte d’Ivoire | data collection | digital identity | healthcare | Identification for Development (ID4D) | KYC | Mastercard | Mozambique | Orange | secure transactions | South Africa | telecom