LibraryblogHelping the 1 billion people without proof of identity

Helping the 1 billion people without proof of identity

It is difficult to imagine life without an ID card or passport, but for one billion people in the world, it’s a harsh reality. As with many modern problems, it may have a digital solution.

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Sarah Hamid
October 30, 2019
Blog Post
Identity Verification

It is difficult to imagine life without an ID card or passport, but for one billion people in the world, it’s a harsh reality. With entire industries emerging to serve the world’s poorest, one of the biggest risk factors is maintaining trust and security without identification. 

Many companies dedicated to making financial services and healthcare accessible through blockchain and beyond, but those who need it most are unable to pass user verification checks or the most basic KYC standards because they don’t exist on paper.

Who are the one billion people without proof of identity?

According to the 2018 ID4D Global Dataset published by the World Bank, 13% of the global population do not own an identification document. This means no birth certificate, passport, ID card, or any proof of existence beyond their physical presence on the planet.

To understand the root of the problem, it helps to take a look at who the undocumented people are and where they live:

  • 81% live in Sub-Saharan Africa and South Asia
  • 47% are below the national ID age of their country
  • 63% live in lower-middle-income economies
  • 28% live in low-income economies

The world’s lowest-income economies tend to be in places with civil unrest, corruption, and poor infrastructure. To develop a system for identifying citizens, the ability to reach all of its citizens and coordinate resources effectively is critical. Political instability, lack of resources, and limited knowledge are huge obstacles that are by no means easy to overcome. 

The cost of issuing proof of identity

Birth registration and providing people with a means of identification are such commonplace services that the cost of having these systems in place is often overlooked. 

If you have an ID card or passport, you likely pay a fee for the renewal of your identification documents. This fee only partially covers the cost of an intricate system that keeps all this data safe and in check.

For example, while €60 for a standard German passport seems pricey, take into consideration that the actual cost is likely much higher. Germany has 148 Embassies and 244 Consulates located all over the world, each with their own set of staff and maintenance costs that come alongside the actual document production process.

While passports and IDs are not handicraft items, but rather the products of a standardized production system, it takes ongoing study and teams of experts on payroll to ensure that it is difficult to counterfeit. 

Are the benefits of an ID worth the cost?

For €5 a year, every German citizen can prove their identity with documents expertly designed to be fraud-proof. With a minimum wage of €9.35 an hour, this is hardly a huge cost. But for people in the lowest income economies, earning up to $700 per household, it is simply not affordable.

In a United Nations speech in September 2015, Mark Zuckerberg claimed that “when communities are connected, we can lift them out of poverty”. To some extent, the internet does have the potential to give people the knowledge and platform they wouldn’t otherwise have.

Understandably, if struggling to survive you are more concerned with procuring food than signing up for a Udemy course or opening an investment account on Mintos. On the other hand, the digital economy is thriving, and anyone with internet and a means to prove who they are can join. 

Digital citizenship as an identity solution

Christopher Allen, the co-chair of the credentials community group of the World Wide Web Consortium, is an advocate for digitalizing citizenship. He sees it as a way of bypassing the costly and, for some nations, near-impossible task of organizing an effective identification system. 

“As the Third World enters the computer age, digital citizenship is providing Third World residents with greater access to human rights and to the global economy. When properly designed and implemented, self-sovereign identity can offer these benefits while also protecting individuals from the ever-increasing control of those in power, who may not have the best interests of the individual at heart.”

However, what Allen proposes goes beyond a mere digital solution. The term self-sovereign identity refers to proof of identification that is created and controlled by users rather than being issued by a centralized institution like a government.

Like bitcoin is to dollars, value is determined by many rather than few. A self-sovereign identity would mean that instead of going to the German embassy for a passport and trusting a government to confirm that you are who you are, you would be able to use your biometric data and information independently to access services. 

A digital identity platform is around the corner

While the idea of a self-sovereign identity sounds futuristic, the Libra Association, backed by Facebook, Uber, and more corporate giants, has its eye on the often ignored market of one billion unidentifiable consumers.  

“An additional goal of the [Libra] association is to develop and promote an open identity standard. We believe that decentralized and portable digital identity is a prerequisite to financial inclusion and competition.”

There are many arguments against commercial entities issuing digital identities. The biggest concern is the conflict of interest that comes with handling commercial, financial, and personal details, particularly in light of Facebook’s poor track record when it comes to data privacy. 

A digital identity, whether self-sovereign or not, is still a powerful solution to a huge population of legally “non-existent” people. In a world where wealth and opportunities are distributed poorly, giving all people access to the same digital services can help level the playing field. 

While Veriff currently helps companies verify customers and stay compliant, our long-term mission is to give people ownership of their personal data and visibility over how it is used by third parties. A digital, fraud-proof identity is an essential part of that vision.

What are your thoughts on digital citizenship and self-sovereign identities? Let us know on Facebook, Instagram, LinkedIn, or Twitter.