Wallets, mDL, biometrics combine to offer a new paradigm for ID and payments

As the name of the Secure Technology Alliance’s (STA) Identity and Payments Summit suggests, identity and payments are still mostly siloed. But that’s changing. A host of speakers at the event are exploring the most likely place for digital ID and payments to converge: the digital wallet. The big question is, how to get people to use them?

To some extent, the answer is, they already are. Wallets are widely available, and the ecosystem of digital IDs and verifiable credentials that populate them is growing by the day. According to a 2024 survey from Javelin Strategy and Research, 59 percent of people reported having used a wallet in the last 12 months. The most-used wallets are Paypal, Apple Pay, Cash App, Google Pay, Venmo and Samsung Pay. But as use cases for digital ID and wallets emerge, the line between payments and digital identity is becoming thinner, and both payments vendors and biometrics and digital ID providers have an opportunity to enter the fray.

A key issue for wallets is what they enable one to do – i.e., where can I use the digital credentials stored in my wallet, be they an mDL, proof-of-age credential, digital passport and so on. To quote Javelin’s Christopher Miller in his talk on harnessing the confluence of biometric authentication and mobile identity in payments, “the availability challenge of wallets is over. But it’s still there for digital IDs and biometrics.”

Mobile driver’s licenses gain momentum but interoperability persists

One of the marquee technologies at this year’s summit is mobile driver’s licenses, or mDL, and it presents a good example of what Miller is talking about. MDL tech has progressed by leaps and bounds in recent years; SAT’s mDL showcase leading up to the summit is plain evidence of that. But national and global networks for mDLs are fragmented, and the problem of interoperability persists. A digital ID that only works in a few places isn’t much good; as Miller asks, why bother with a digital wallet if you still need to bring your cards?

In terms of what will push wallets over the edge, the recipe seems to call for increased collaboration on robust standards and, especially, a push to equip businesses with the tech they need to accept digital credentials. Mobile driving licenses will serve as a catalyst – but only if they operate within a network that can be trusted, can be scaled globally, and is reliable.

Bringing the utility of payments to the digital identity space

Speaking on the power of secure and scalable digital credentials, Simon Hurry, VOP of EMV products for Visa in North America, points to the role established trust networks (like Visa) can play. The company is launching the Visa Issuing Authority Authenticator, which will allow a relying party to digitally authenticate the government authority that issued a digital identity credential. Since Visa is everywhere, says Hurry, “you can present an mDL from anywhere in the world and the relying party can send it to Visa to validate it.” This presents a potential fix for the problem of interoperability – but it also raises the question of how many smaller firms will be allowed to work in the space behind established giants.

Hurry strongly recommends putting payment token functionality wallets to increase usefulness for the consumer. He argues that the standards, payments, and secure authentication elements are already there to enable, for instance, self-service car rental kiosks, where ID verification and payments can be accomplished within the same wallet.

In the U.S., industry is likely to lead the charge on wallets and digital ID, rather than a top-down mandate at the federal level, akin to the EU model. But on the state level, California has led the development of mDLs and digital identity wallets. Ajay Gupta of the state’s DMV says that on top of mDLs, California’s wallet will be able to house additional credentials and documents, such as those for registration, age assurance, educational certification, and so on. And the department is working on integrating a tokenized payment system for use cases such as disbursing disaster relief funds.

Gail Hodges, executive director of the OpenID Foundation, says government engagement with wallets can help stem monopoly, and notes that the foundation’s tests are now available, so that “building out code, you can build out to the tests, to know you’re designing compliant software.”

Apple recently opening the iPhone’s NFC chip to third-party apps should also help expand the playing field, as biometrics, digital ID and payments continue to intermingle.

Biometric authentication a lynchpin for secure digital credentials

Biometric authentication is increasingly a key piece of the front end of payments done through a digital wallet. Javelin’s data shows that most consumers are familiar with fingerprint and facial recognition (the split matches almost one-to-one against a user’s mobile OS; Apple users know facial recognition, Android users fingerprint biometrics.)

In a fraud prevention panel hosted by AuthenticID’s Blair Cohen, Ajay Amlani, CEO of Aware and an advisor for Tools for Humanity, identifies the three factors of identity: “What you know, what you carry and who you are.” His argument is that mDLs or other digital credentials housed in ID wallets must leverage strong, secure biometric authentication and liveness detection. He notes that advanced mobile tech has eliminated the need for costly hardware, and that, on the question of privacy risks associated with biometrics, “People are no longer concerned. They are asking for biometrics.”

Visa’s Hurry concurs, staunchly convinced that “strong authentication based on cryptographic techniques” can make mDLs “the best weapon in our arsenal” for fighting fraud.

“Take this technology seriously,” he says. “It’s the right technology.”

Tomorrow, Biometric Update dives deeper into the Summit’s discussions on the current fraud landscape, and considers the question: have we been getting it all wrong on friction?

Article Topics

biometric authentication  |  biometrics  |  digital ID  |  digital identity  |  digital wallets  |  Identity and Payments Summit  |  mDL (mobile driver's license)  |  Secure Technology Alliance