Following a successful proof of concept with 17 domestic businesses, Australian e-payments service eftpos has announced it will begin official trials of its Digital Identity solution in a bid to reduce bank fraud and spur fintech innovation.
ePal, eftpos’s parent company, spruiked its new identity solution as its next major leap in creating a more secure and competitive digital payments landscape – a step deemed crucial in response to digital acceleration initiatives catalysed by the Covid-19 pandemic.
Further, it said, the Digital ID solution affords fintechs greater access to markets and infrastructures typically ”with high barriers to entry”, such as government welfare programs and relief funds.
Examples of fintech innovation opportunities made available through the Digital ID solution include the “secure distribution of government funds in social security, disaster relief, health services or small business assistance”, the ePal said in its submission to the Select Committee on Financial Technology and Regulatory Technology.
The Select Committee was established late last year by the Australian Senate in an effort to promote further competition and diversity within Australia’s financial services sector, assessing opportunities and barriers for fintechs and regtechs in the local market, as well as the public’s adoption of financial technology.
eftpos said its digital identity solution, alongside a payments capability, could be embedded within a proprietary mobile app, leveraging existing industry infrastructure to create a common platform for merchants, government, banks, and other authorised deposit-taking institutions.
While yet to provide specifics on its technology backend, eftpos said the solution would seek to reduce the impact and incidence of card fraud and “protect Australian identities”.
Built on the Australian Payment Council’s (APC) TrustID framework, the digital identity solution is primed for interoperability, allowing fintechs to drive similar ubiquity in payments innovation, ePal said. The solution can already reach 40 million bank accounts.
eftpos has also touted the identity solution’s privacy credentials over overseas rivals, with eftpos, as an Australian-based organisation, able to process transactions locally and keep personal data of Australians onshore.
“In addition, eftpos is not owned or beholden to any other commercial provider so it can operate as a neutral provider of Digital Identity solutions, maximising take-up and use across the broader economy,” the company said in a statement.
The RBA has been a staunch advocate for an Australian-issued portable digital identity credential as bank fraud rates soar to almost $500 million annually.
Besides digital identity, eftpos also stressed the need for digital payments as a priority initiative for fintechs and dual network capability (least-cost routing for merchants) as necessary for immediate industry reform as part of its submissions paper.