Digital ID challenges reflected in UN group’s principles for responsible digital payments
A UN-affiliated group is calling on organizations involved in digital payments to adopt a set of principles to increase trust and inclusion in economies around the world in support of the UN Sustainable Development Goals.
The Better Than Cash Alliance has published a 115-page report to outline ‘UN Principles for Responsible Digital Payments’, which are necessary to implement to mitigate the risk that “furious growth” in digital payments has created.
The report does not expend much ink directly on digital ID, but the motivations behind the principles are clearly drawn from the problems a lack of digital ID creates for many people, and the potential for innovative approaches to digital ID to bridge gaps in financial systems.
The use of appropriate security controls to mitigate transaction risk, like biometrics, is noted in the section on Principle 2: ‘Ensure funds are protected and accessible.’
The group lauds the use of digital transfers by governments, which allowed India’s government to push COVID-relief payments out to 160 million low-income people “in a matter of hours” in one example. A separate, 4-page report specifically urges governments to take up the practice. Domestic migrants, however, faced challenges due to interoperability limitations and failed biometric matches, which make up parts of “an insufficiently developed cash-out ecosystem,” and serve as an example of poor implementation.
Kenya’s Inua Jamii G2P cash transfer program allows caregivers or representatives of minors and disabled users to register their own biometrics on the user’s behalf, which is cited as an example of Principle 5: ‘Design for individuals.’
Pakistan’s ‘Ehsaas Emergency Cash’ digital payments system, which provides doorstep banking services to underserved members of society like the elderly, women, and people with disabilities, is singled out in the report as an example of the first principle of treating users fairly. A one-time cash grant reached 15 million families 2020, and a second round of payments will reach a million families this year, The Express Tribune reports.
The other principles are to prioritize women, as they are less likely to possess digital ID, and also safeguard client data, ‘be transparent, particularly on pricing,’ provide user choice through interoperability, ‘make recourse clear, quick and responsive,’ and ‘champion value chain accountability.’
If the principles are adhered to, the Alliance says, the attainment of the UN’s SDGs can be accelerated.
An Idex Biometrics executive told Biometric Update in late-2018 that the fears raised by increasing digital payments could be mitigated with technologies like biometric payment cards.