When the head of the governmental identity authority reels off statistics on credit-card use and fraud prevention during the opening address of Cards and Payments Middle East, a collective of sector stakeholders, the dots are not hard to connect. From the time they first had their biometrics incorporated into the Emirates ID, UAE citizens and residents have been led along the line to a digital future where a government-issued identity card is an obvious vehicle for payments.
This month has already seen the successful pilot of the Emirates ID being used to withdraw money at some Al Hilal Bank ATMs. Following this, the proof of concept of an identity card being used at a point-of-sales (POS) terminal has been carried out. And with the completion of the My Number My Identity campaign, where every mobile user re-registered their mobile number, the next step is the integration of mobile SIM cards into this system.
The launch of Al Etihad Credit Bureau on May 18, which will allow banks to access consumers’ credit histories via a centralised system, also paves the way for other integrated services.
Dr Ali Al Khouri, Director General of The Emirates Identity Authority (EIA), says, “Our recent efforts in the UAE payment industry have borne fruit. The use of the ID card as a secure identity document in an ATM has become a reality. You will soon see the ID being used for conducting secure and authenticated transactions at POS.” Dr Al Khouri says 85 per cent of all fraudulent transactions in 2012 happened with debit cards, which means $1.15 billion (Dh4.22 billion)worth of losses due to fraud out of a total of $1.35 billion involved signatures. He adds that the financial sector is eager for a solution that promises more security and is already available to every citizen and legal resident.
“Since we have announced the pilot, many banks have approached us. With the infrastructure and bundle of services that we are providing, we are going to have, in the short term, the financial sector participate more and more in using the identity card,” says Dr Al Khouri.
Citizen consumer
For users, the idea is to think of oneself as a consumer and a citizen/resident at the same time. The rest will be done by the issuing authorities. Bhairav Trivedi, CEO of payment solutions provider Network International, which signed an MoU with EIA this month to provide support for the UAE government’s Smart Government initiative, says consumers will love the concept of more convenience.
“Ideally, you want to be able to carry a single piece of plastic, yet choose all your plastics so you don’t have to worry about which one you leverage. If you have an Emirates ID, you will give that ID information each time you register for a new card.
If there was a way to use that number to say that give me all the accounts associated with that Emirates ID, you can set priorities. You can say I use this card first with air miles as rewards, until I get to the 20,000 mile limit, then I start to use the second card. For groceries, I always use my debit card but then for other purchases I use my credit card, and all that,” he says.
Mobile identity
The next step in identity management is the digital verification of identities via mobile phones. “This will be done by linking smartphones and ID cards with each other, by downloading data onto the phone chip so users can complete their transactions and fee payments using their phone. This will be a simple process that takes no more than entering a pass code,” Dr Al Khouri says.
The Trusted Service Manager (TSM), part of the UAE Telecommunications Regulatory Authority’s mGovernment Initiative, has revealed a plan to launch a new smart chip for mobile phones, according to reports this month. The chip will comprise compressed data for the user, such as an identity card, a contact card and a smart portfolio for government services. The smart(er) chip, which links between ID cards and smartphones, will enable users to complete government transactions requiring identity verification and fee payments using a personal smartphone via a simple process involving a pass code. According to reports in the Arabic media, we can expect to see about 500 new smart chips in early 2015 as part of a pilot.
Working as one
Why stop at payments, asks François Chaffard, Payment Services Director, Middle East and Africa, at digital security company Gemalto. “You have to provide more than just payments on the mobile. If you only move what is on cards on to the mobile, there is little value. The key thing is that you make sure that every application, such as loyalty, is attached to the payment. What people want is one simple tap to pay and redeem coupons and update loyalty cards. Mobile is bringing better customer experience. That is why it brings different stakeholders together, sitting at the same table and moving in the same direction,” he says.
The convergence that we may see exemplified in the ID requires various unrelated entities to work as one. Pim Bonenkamp, Managing Director, MEA, at UL, a global independent safety science company involved in consulting and certification that worked with the RTA to implement Nol cards and is currently working with many UAE government departments, says technology works at a national level. Logically, you already pay for government services using various technologies that need the government and the payment sector to align.
“The government was a specific domain, payment was a specific domain and the mobile domain was also very specific,” he says. “Now you see that they’re merging more and more with each other. And I think there are a lot of opportunities to work together, in enabling an ecosystem that interacts in the right way. Because, if everyone does their business and they are all creating their own wallets, for instance, that will not work in the end. You will have five or six different solutions in one country. What we are enabling is the creation of one central platform where everyone can be on board. You don’t talk about competition. You talk about running the best solution you can in the nation.”
With Dewa bills, Salik refills and other services integrated with the banking system, UAE residents are no strangers to the concept. Suvo Sarkar, General Manager — Retail Banking and Wealth Management, Emirates NBD, says, “Government services and telecom operators have had some integration in the current banking environment. For example, with Emirates NBD mobile banking and online banking platforms a customer can query and make payments for 26 government and other services. Each stakeholder plays a very important role in the ecosystem of the consumer. As digitisation increases we will see all three stakeholders continue to collaborate closely to deliver better, cheaper and regulatory-compliant services to customers.”
Allaying any fears of government control over financial information, Dr Al Khouri says, “I would like to correct an assumption that we are going to store any financial information. What we do is provide the authentication platform. Financial institutions use the ID credentials to link a person to their account at their back end. We are not storing any financial information.”
What’s next?
Banks have to upgrade their infrastructure to enable the use of identity card for transactions. “Today, even if you have a chip-enabled card, every ATM reads the magnetic strip to activate the ATM. Al Hilal actually changed the hardware to activate the ATM by chip,” says Trivedi.
The idea of all your cards coming onto one platform authenticated by the identity card is also in the making, so are transactions on POS terminals. For POS terminals to accept transactions based on biometrics a further upgrade may be needed.
Trivedi adds, “After chip-and-PIN, NFC has already come in [on terminals] to enable tap and go. Second generation chip-and-PIN terminals have NFC. People are already selling machines with fingerprint recognition.”
