[Dave Birch] I’ve mentioned (in a tedious, repetitive cycle) that there is a connection between national ID schemes, financial inclusion and payments. To put it crudely, if you “solve” the “ID problem” then the “payment problem” goes away. Let’s set aside what any of those phrases in quotation marks actually mean for a moment. Let’s also set aside the moral and social issues for a moment, and it is clear that:

If the payment system knows absolutely who you are (because of the ID card) then it becomes relatively easy to handle the funds transfer. The identification and authentication cost would, presumably, be shared between the payment application and lots of other applications.

[From [ Digital Identity Forum ]]

Now, I’m certainly not saying that that is the best possible use of technology, and have bored for Britain on the subject of pseudonymity and suchlike, but I am saying that in some circumstances this might be the best overall solution to the problem of extending financial inclusion.

Residents in Oman will soon be able to make payments electronically even if they do not possess a credit or debit card — and it’ll be thanks to the launch of ‘e-purse’ scheme here. All they require is their ID or residency card… The new facility allows people, both nationals and expatriates, to store/load money in their national ID and residency cards and use them to make payments electronically.

[From Khaleej Times Online – Electronic Payment Through ID Card in Oman Soon]

Since ID cards are mandatory in Oman, you can see the logic. What is point of giving people yet another card to carry around when they all have an ID card all the time? And given that getting the less well-off out of the cash economy is a relatively simple way to improve their lot in life, it’s an obvious social inclusion strategy.

(Yes, yes, anonymity, I know. But let’s set that aside for a moment as well.)

India is going to provide a genuinely surprising case study, I think. They are undertaking an incredibly ambitious national ID scheme, attempting to enrol a billion people at a fraction the cost of the UK’s scheme. They’ve already started thinking about the new functionality for the mass market. If there’s an ID scheme, what can you do with it that will make life easier for people and therefore make them more likely to enrol?

The government’s ambitious unique identity (UID) project, under the stewardship of Nandan Nilekani, proposes to introduce a micro-payment platform that would make use of mobile technology.

[From Moneylife : UID to introduce micro-payment platform]

Micropayments. Interesting. Now, as I mentioned at the beginning, there are some social issues around this type of system and we have slightly skipped over them here.

There is a difference between people tracking a state, and the state, and the ‘market’ tracking people. The UID is clearly not what it is presented as being: it is not benign, nor a mere number which will give an identity to those who the state had missed so far.

[From The personal is the personal]

Look, it isn’t the concept of ID cards or the concept of micropayments that are the issue here. It’s the decision to implement using “conventional” approaches that will, I suspect, end up causing a problem. If there were an Indian national micropayments system was being used for small online purchases and perhaps also to replace cash in some circumstances for physical transactions that would be great. But suppose someone then takes the log of all of these transactions and put them on the internet for everyone to see? It might work in some places (Norway?) but think of the problems it could cause.

It is entirely possible to implement such a system using cryptographic techniques to hide the identity of participants depending on circumstances. In fact, I think I could reasonably argue that since banknotes have serial numbers on them, these techniques could make a cash replacement system that provides more anonymity than cash if desired. I say “if desired” because I remain sceptical that there is any mass market demand for anonymity. (Which is not to say that we may not still want to implement anonymity because it is better for society, irrespective of whether there is any demand for it at all, mass market or otherwise.)

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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