Will Payment Cards become Obsolete - No Not Mobile!
Most articles with a headline like this normally then go on to state that the world is going mobile, we will soon all be making mobile payments for all our transactions, the wallet is dead. Putting aside the fact that Apple and others have still to give me a mobile phone with a battery that last a full day – it gets hard to pay for things when the battery is flat, putting aside that currently I am limited to circa £20 for any single transactions, I just don’t want to as they say put all my eggs in one basket. Lose my phone and I am totally stuffed, can’t pay to get home or call the wife/girlfriend to pick me up! – really stuffed. And as for the rest of the world whilst if you look at the number of mobile phones compared to the global population we all have one, unfortunately less than 50% of the land mass has mobile reception!
However, what perhaps is more interesting is the global market for National Electronic ID (eID) programs in circulation will double from 1.75 billion to 3.5 billion - almost half the world's population - Acuity Market Intelligence.
Asia, with its vast population, will dominate the market representing nearly 70% of all National eID cards issued and this is also one of the key regions where huge payments growth is forecast by many.
Acuity considers National eID programs in the following categories:
• Category 1: Chip or Optical storage based National ID card with or without biometrics;
• Category 2: A Traditional or non-chip based ID card leveraging biometrics to ensure each cardholder is uniquely identified;
• Category 3: A biometric based centralized registry that issues a unique identity number for the enrolled population.
Report revenues include the revenues from all three categories whereas the actual National eID card unit count only includes chip-based or optical storage cards.
Number of Programmes
Thus what we see in a continuing increase in National ID programmes that are starting to hold biometric data with in addition to the 3.5 billion chip-based National eIDs issued by these 95 countries, another 300 million National ID cards will be issued by 31 countries that have integrated biometrics into non chip-based card programs.
If we consider this along the announcement in May 2013 that The Nigerian National Identity Management Commission (NIMC) and MasterCard today will roll-out of 13 million MasterCard-branded National Identity Smart Cards with electronic payment capability as a pilot program. We see potentially the future.
As part of the program, in its first phase, Nigerians 16 years and older, and all residents in the country for more than two years, will get the new multipurpose identity card which has 13 applications including MasterCard’s prepaid payment technology.
The new National Identity Smart Card will incorporate the unique National Identification Numbers (NIN) of duly registered persons in the country. The enrollment process involves the recording of an individual’s demographic data and biometric data (capture of 10 fingerprints, facial picture and digital signature) that are used to authenticate the cardholder and eliminate fraud and embezzlement. The resultant National Identity Database will provide the platform for several other value propositions of the NIMC including identity authentication and verification. Upon completion of the National ID registration process, NIMC aims to introduce more than 100 million cards to Nigeria’s 167 million citizens.
Yes there will be technical challenges and we have still to see this programme roll out but in theory the ability in many emerging markets to combine an ID with a payment card must be a logical one. After all the result is almost 100% financial inclusion. And even in developed markets a recent survey by TSYS in North America consumers recognised the need to combine with ID into their digital payment wallet as a key benefit the require.
Thus if governments are starting to roll out physical biometric chip based ID cards surely a logical step will be more of them may roll out with payments on. Thus my ‘payment card’ will become obsolete as I have combined payment and national ID card in many countries.