Long read: E-Identification on the rise – opportunities and challenges for the e-commerce sector

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The development of Electronic identification (eID) schemes in recent years by national governments under the European Commission’s e-Government Action Plan, has been a significant contributor in the drive and acceptance of the digitization of public administrations.

An eID is a tool which ensures citizens or organizations secure access to online services. They also have the potential to allow for the easy, cost efficient and convenient identification and authentication of customers in electronic transactions. Through this, eID schemes can facilitate a safe and convenient process of accessing and performing government or regulatory services such as paying taxes and may assist online retailers in the identification of their customers to reduce the risk of online fraud.

Opportunities and potential benefits

The application and use of eID schemes has the potential to generate a variety of benefits for citizens, businesses, and governments by enabling e-governments services, and improving security for online transactions. Many kinds of e-commerce transactions may become more efficient with an e-ID system. Secure eID schemes may help individuals identifying and authenticating for digital services, securely exchange online communications, and create legally-binding electronic signatures, such as to sign a contract or enroll in a service.

Businesses may use identity management functions when interacting with their customers, such as to authenticate users for online applications. For convenience, citizens may benefit from eID schemes that enable single-sign on, which gives individuals a more seamless online experience by allowing them to use one credential to sign in to multiple sites rather than have to log in multiple times using different credentials.

Furthermore, if set up in that matter, an eID has the potential to act as a wallet within which all information concerning that person are stored.

Challenges

National electronic identification schemes, if government backed, may be able to guarantee the unambiguous identification of a person, simplifying and reducing the costs of identification and authentication.

However, while the eIDAS legislation, which is to be implemented into national legislation by 29 September 2018, legislates for the cross-border recognition of national eID schemes for government services, there are currently no provisions for cross-border acceptance by the industry. This means that while governments and government services across the EU have to accept electronic IDs from another Member State, online merchants may continue to refuse them.

This insufficient cross-border interoperability and accessibility of national eIDs prevents citizen and businesses from benefitting fully from the Digital Single Market. Among others, concerns also persist regarding privacy and access to information and content.

More specifically, the more the applicability of an eID is extended, the more information concerning the identity of a person is stored on the electronic ID. While access to a larger set of information/data may be useful for some applications of eIDs such as booking flight tickers (where the customer identity may quickly and reliably be scanned with no-fly and anti-terror lists), for others, such as purchasing tobacco or alcohol, a very limited set of information is needed (such as the age of the customer).

Furthermore, in the private sector, government backed eIDs face stark competition from internet giants such as Google, Facebook, LinkedIn or other platforms which the user may use to identify itself on other websites. A very common example of this would be the logging into of Free Wifi Hotspots using your Facebook account.

While such industry electronic identities are highly convenient and accessible, the user is essentially free to choose his or her identity, often having more than one online identity depending on the platform used. As a result, with such industry based eIDs, there is no assurance that the information underlying the identity is trustworthy and correct.

Next steps

With work ongoing at the European and national level to establish electronic identification schemes, and the potential economic benefits to the e-commerce sector, Ecommerce Europe has long advocated for interoperable and mutually recognized eID schemes to boost security, convenience and trust in the European cross-border e-commerce market.

Ecommerce Europe, over the coming months, will develop a dedicated position on electronic identification.

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