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Digital identity and its role in safer payments

digital identity

Digital identity and its role in safer payments. Source: pixabay.com

Identity theft costs consumers and businesses around fifty billion dollars a year. Fears of identity theft hinder business, whether they’re afraid to place an order on your website or use your app to schedule and pay for service. That’s why digital identity management and verification solutions are taking off. Let’s learn more about digital identity and its role in safer payments.

What is digital identity?

Your digital identity starts with your usernames, passwords, social media profiles and other online accounts. It includes your digital footprint or all the traces you leave online. That “footprint” encompasses your search history, activity history with apps and websites, your transaction history and other things recorded as you interact with apps and online tools. However, your digital identity includes the information required for you to interact with online services. For example, your login to your bank account’s website and your credit card number are part of your digital identity.

Why does your digital identity matter?

Your digital identity may be used to flag potentially fraudulent activity. For example, your bank may freeze your account because they see a wave of purchases on websites you don’t normally visit or a large cash withdrawal from a location far away from where your digital footprint says you are.

And it is your personally identifiable information used to make online purchases and access financial products that identity thieves are seeking. They want this information so they can drain your bank account, take out loans in your name or buy things using your financial accounts. This is why digital identity verification is being widely adopted as yet another layer of IT security.

How does digital identity verification make payments safer?

Phishing emails trick you into entering your login credentials on a fake website. Keyboard loggers and other types of malware may record your login credentials and financial account information as you log into legitimate websites and apps. These are only a few ways your digital identity could be stolen.

Digital identity verification methods such as biometric authentication prevent stolen personally identifiable information from being used without your permission and make it harder to steal in the first place. For example, it is much easier for malware to capture data typed into a field than grab the encrypted file where your thumbprint or face print is stored. The use of a thumbprint, voice print or face print to authorize a financial transfer or complete a short-term loan application prevents someone else form using your personal information to steal money.

Then there’s the fact that it is hard for someone to steal your thumbprint when you’re paying for food or gas, whereas card skimmers have been around for years. On the other hand, there are already protections built into biometric authentication systems to make sure someone doesn’t steal your online photos to try to complete a financial transaction. That’s where liveness checks come in. They ask for a brief video of your face, and the AI looks for changes in the pupil and blinking to prove it is a live person whose face matches yours. This has the side benefit of preventing most deep fakes from passing liveness tests, too. And the biometric scanner can ask you to do something a deep fake isn’t prepared for like “smile on command” or “do duckface”.

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