The holiday season has everyone thinking about shopping, both online and off. It should also cause shoppers and sellers alike to consider cyber security. One of the biggest problems with online transactions - especially for online sellers - is identity fraud. Sell something to an individual who is using a stolen credit card or someone else's identity, and you stand to lose either money or merchandise.
Over the years, there have been a number of attempts at tools that enable individuals to certify that they actually are who they say they are in their communications online. Companies like VeriSign and Thawte provide digital signatures and certificates that you have to apply for, pay for, and then attach to your outgoing email addresses or Web pages. You exchange versions of those signatures or certificates with visitors or correspondents. Now, a UK-based company called miiCard has what it says is a simpler solution that's just as secure and designed especially for individuals.
Rather than relying on algorithms to create the long blocks of code that certify an owner's identity, miiCard uses an individual's bank account to verify who they are. The idea is that banks have already taken pains to identify you: bank employees met you in person when you obtained your account. If miiCard can verify that you have online access to a bank account, your identity should be bona fide.
"By using your online financial relationship, we can verify your identity to an equivalent level of a driving license or passport, as this primary identity check or equivalent has been carried out by your financial provider when you created your account," says Cassie Anderson, miiCard marketing manager. "This information is typically only known to you. "
When I registered for an account, I discovered that I can't actually get an identity card from miiCard just yet. The company was only founded in September and is processing account activations gradually.
I expressed to Anderson my own concern about the company somehow having access to my bank account. She explained that miiCard itself doesn't have access to my bank username, password, or account numbers. Instead, the California-based online financial services provider Yodlee stores your bank account information.
When you create your account with miiCard, you send your bank account information to Yodlee. "Yodlee is the leading provider of online financial account aggregation services," says Anderson. In addition, she adds, your account information with miiCard is protected by encryption and two step verification: your mobile phone number and passwords.
miiCard, which is based in Edinburgh, Scotland, was created by James Varga, a Canadian entrepreneur and IT expert. Varga wanted to solve the problem of proving one's identity online with the same authority as a driver's license or passport in the offline world.
miiCard aims its services at two audiences. The first is businesses seeking loans or other financial transactions, or that offer professional services and what miiCard calls "high-value goods." In the financial services world, people seeking mortgages or other financial products online often have to go to their brick-and-mortar bank to verify their identity, and miiCard seeks to eliminate that step.
The second audience consists of consumers and small business owners who want to know exactly who they're dealing with online. For consumers, the first 10,000 accounts are free; after that users will pay $1.99 per month, or $20 per year. Half of miiCard's initial registrations have come from the U.S.; registrations are also open to individuals in Western Europe, Australia, New Zealand, South Africa and India.
The need for identity verification doesn't just apply to ecommerce, by the way. miiCard advertises itself as a resource for those who try online dating. Knowing someone's identity is accurate would be helpful in that area; however, miiCard doesn't say that it will verify some of the things that are often "fudged" on dating sites, such as photos, ages, or personal history.
The big question is, will consumers or businesses take the time to apply for a miiCard account? Not surprisingly, the company thinks the answer is Yes. "We believe miiCard provides an opportunity for sellers to build trust with prospective customers and provide a level of comfort that will support and encourage sales," says Anderson. "It takes 5 to 10 minutes to set up a miiCard account, you set it up once and the system regularly revalidates your identity so that it is always up to date for when you need it."
If you're a small business owner selling on your own website and/or a third-party marketplace, you would sign up for a miiCard as a consumer, she explains. You could then share your profile with your prospective customers. In this case miiCard would be a way of providing new customers with a level of trust and comfort when buying from you online.
Businesses such as banks, accounting firms, credit card companies, or peer-to-peer lenders can also use miiCard to perform identity verification of consumers through their website, typically where regulation requires they verify a primary ID check. In this case a business would be charged a per transaction fee that is typically less than the normal processing fee. For example, the cost of having a letter signed, returned, and processed for a credit card in the UK is 15 to 18 pounds ($23.50 to $28.20), or to process a loan the fee could be hundreds of British pounds. "For miiCard, regardless of the value, the fee is 12 pounds per transaction - quite a potential savings, especially when you consider the opportunity loss (drop-out) because people don't complete the process," says Anderson.
miiCard calls itself a digital passport (or virtual driver's license) that allows consumers to prove they are who they say they are online in real time. The company explains, "Owned and managed by the individual, miiCard allows the consumer to track, monitor and so take control of their online identity." You can watch an online demo on YouTube.