miiCard, a company that provides
online identification, is getting ready to launch its first
consumer-to-consumer identity solution. It has received positive
feedback from the likes of eBay, Gumtree and PayPal and James
Varga, CEO of miiCard tells Duygu Tavan why a digital passport is
so necessary right now.
Go deeper with GlobalData
Trust is still the biggest barrier that
prevents the digital economy from achieving its full
potential. According to analysts, the digital economy
accounted for 7% of total GDP in 2010. In the next couple of years,
it is estimated to account for between 9-10%. Considering the
internet has been around for 15 years, this has been a slow
development. So a rise of up to three percentage points will be a
giant leap. One may think this will happen easily, but this is not
the case at all, says Varga.
Consumers and businesses already do as much as
they can online – banking, trading, shopping. What the industry
needs to, in order for the digital economy to account for up to 10%
of GDP in a couple of years, is not to be more active online, but
do things differently, he argues.
By doing things differently, the one key issue
jumping to mind is trust.
For instance, when making an online
application for a credit card, the consumer still has to go into a
branch to identity themselves. This leads to drop-out rates and
begs the question: What is the point of offering the card online
when the consumer still has to go to a branch anyway? They may as
well go into a branch to make the application straight away.
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By GlobalDataAnalysts estimate that a staggering 70-90% of
all online financial transactions are terminated when the customer
is asked to provide physical proof of identity.
Of course, the reason consumers do need to go
into a branch and identify themselves physically is because, in the
online world, one cannot really prove who they are. Yet.
An online passport ready to go live
What the virtual industry needs, therefore, is
an online passport. And UK-based miiCard is a company that provides
such an online identity solution. The miiCard is a sort of online
passport that allows users to validate their identity when
transacting online as well as combating the problem of internet
fraud.
miiCard is targeting a variety of sectors, but
the focus remains firmly on the internet and identity, risk and
fraud issues linked to it. It aims to offer an alternative to the
traditional offline checks such as driver’s licence, passport or
utility bills.
The miiCard works by allowing users to set up
a miiCard account and validating their identity by linking it to
another account such as a bank account. The points of validation
are checked every night to keep the fraud level to a minimum and
make sure the information that was saved when setting up the
miiCard account is still valid.
Less than two months ago, miiCard closed its
first funding round and completed a management buyout.
The funding raised a total of over £550K from
VC, angel and public sector sources. Investment has been secured
from angel syndicate Par Equity, venture capital group IQ Capital
and the Scottish Investment Bank’s Scottish Seed Fund.
Now the company is getting ready to launch its
first consumer-to-consumer identity solution, which should be
available before the end of November, says James Varga, CEO of
miiCard.
eBay, PayPal, Gumtree “get
it”
The company has been in talks with the likes
of eBay, PayPal, Gumtree and Varga says that they “understood the
concept immediately” and gave positive feedback.
“We create a verification of the consumer’s
identity and link it to their accounts as points of reference.
There are companies who focus on the identity, fraud solutions. But
they still require a physical identification,” argues Varga –
something that miiCard is now looking to change.
Initially, the consumer needs to sign up to a
miiCard account, which, according to Varga takes “five to ten
minutes”.
Then this is linked to the user’s mobile phone
number, so that when the consumer uses its miiCard identity to make
an online purchase, they get sent a one-off three-digit code
which they will have to type in in order to confirm the purchase.
This works a bit like the Secure Codes provided by MasterCard and
Visa.
miiCard sits between the consumer and vendor.
The consumer wants to deal with a vendor. So for instance, they may
want to trade on eBay. eBay in turn needs to be sure, have trust or
assurance, that the consumer is who they say they are.
These two faces of online transactions are
steadily being recognised by the industry, says Varga.
“Our focus is on proving who you say you are,
in a purely virtual world. Creating the trust between the consumer
and the business is essential.”
Trust is a regulatory issue. With so many regulations to comply
with – Know Your Customer, anti-money laundering and Consumer
Credit Act legislation – e-businesses actually lose out on revenues
because they are not able to comply with these rules and offer
consumers a way of identifying themselves online.
